10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-15817

Old National Bancorp

(Exact name of registrant as specified in its charter)

 

Indiana		35-1539838
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
One Main Street		47708
Evansville,	Indiana	(Zip Code)
(Address of principal executive offices)

(800) 731-2265

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	ONB	The	NASDAQ	Stock Market LLC
Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A	ONBPP	The	NASDAQ	Stock Market LLC
Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C	ONBPO	The	NASDAQ	Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☑   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

The registrant has one class of common stock (no par value) with 292,621,000 shares outstanding at October 31, 2023.

OLD NATIONAL BANCORP

FORM 10-Q

TABLE OF CONTENTS

			Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets (unaudited)		4
	Consolidated Statements of Income (unaudited)		5
	Consolidated Statements of Comprehensive Income (Loss) (unaudited)		6
	Consolidated Statements of Changes in Shareholders’ Equity (unaudited)		7
	Consolidated Statements of Cash Flows (unaudited)		9
	Notes to Consolidated Financial Statements (unaudited)		11
	Note 1.	Basis of Presentation	11
	Note 2.	Recent Accounting Pronouncements	11
	Note 3.	Acquisition and Divestiture Activity	13
	Note 4.	Net Income Per Common Share	14
	Note 5.	Investment Securities	15
	Note 6.	Loans and Allowance for Credit Losses	18
	Note 7.	Leases	29
	Note 8.	Goodwill and Other Intangible Assets	30
	Note 9.	Qualified Affordable Housing Projects and Other Tax Credit Investments	31
	Note 10.	Securities Sold Under Agreements to Repurchase	33
	Note 11.	Federal Home Loan Bank Advances	33
	Note 12.	Other Borrowings	34
	Note 13.	Accumulated Other Comprehensive Income (Loss)	36
	Note 14.	Income Taxes	38
	Note 15.	Derivative Financial Instruments	39
	Note 16.	Commitments, Contingencies, and Financial Guarantees	42
	Note 17.	Fair Value	43
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		50
	Forward-Looking Statements		50
	Financial Highlights		51
	Non-GAAP Financial Measures		53
	Executive Summary		56
	Results of Operations		57
	Financial Condition		64
	Risk Management		68
	Critical Accounting Estimates		74
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		74
Item 4.	Controls and Procedures		75
PART II.	OTHER INFORMATION		76
Item 1A.	Risk Factors		76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		76
Item 5.	Other Information		76
Item 6.	Exhibits		77
SIGNATURE			78

2

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

As used in this report, references to “Old National,” “the Company,” “we,” “our,” “us,” and similar terms refer to the consolidated entity consisting of Old National Bancorp and its wholly-owned subsidiaries. Old National Bancorp refers solely to the parent holding company, and Old National Bank refers to Old National Bancorp’s bank subsidiary.

The acronyms and abbreviations identified below are used throughout this report, including the Notes to Consolidated Financial Statements (Unaudited). You may find it helpful to refer to this page as you read this report.

AOCI:  accumulated other comprehensive income (loss)

AQR:  asset quality rating

ASC:  Accounting Standards Codification

ASU:  Accounting Standards Update

ATM:  automated teller machine

BBCC: business banking credit center (small business)

CECL: current expected credit loss

Common Stock:  Old National Bancorp common stock, no par value

DTI:  debt-to-income

FASB:  Financial Accounting Standards Board

FDIC:  Federal Deposit Insurance Corporation

FHLB:  Federal Home Loan Bank

FHTC:  Federal Historic Tax Credit

FICO:  Fair Isaac Corporation

First Midwest: First Midwest Bancorp, Inc.

GAAP:  U.S. generally accepted accounting principles

LGD:  loss given default

LIBOR:  London Interbank Offered Rate

LIHTC:  Low Income Housing Tax Credit

LTV:  loan-to-value

N/A:  not applicable

N/M:  not meaningful

NASDAQ: The NASDAQ Stock Market LLC

NMTC: New Markets Tax Credit

NOW:  negotiable order of withdrawal

OCC:  Office of the Comptroller of the Currency

PCD: purchased credit deteriorated

PD:  probability of default

Renewable Energy:  investment tax credits for solar projects

SEC:  U.S. Securities and Exchange Commission

SOFR: Secured Overnight Financing Rate

TDR:  troubled debt restructuring

UMB: UMB Bank, n.a.

3

OLD NATIONAL BANCORP

CONSOLIDATED BALANCE SHEETS

(dollars and shares in thousands, except per share data)	September 30, 2023		December 31, 2022
	(unaudited)
Assets
Cash and due from banks	$	381,343	$	453,432
Money market and other interest-earning investments	1,282,087		274,980
Total cash and cash equivalents	1,663,430		728,412
Equity securities, at fair value	69,880		52,507
Investment securities - available-for-sale, at fair value (amortized cost    $7,719,944 and $7,772,603, respectively)	6,414,761		6,773,712
Investment securities - held-to-maturity, at amortized cost (fair value    $2,393,621 and $2,643,682, respectively)	3,027,914		3,089,147
Federal Home Loan Bank/Federal Reserve Bank stock, at cost	365,588		314,168
Loans held-for-sale, at fair value	122,033		11,926
Loans:
Commercial	9,333,448		9,508,904
Commercial real estate	13,916,221		12,457,070
Residential real estate	6,696,288		6,460,441
Consumer credit, net of unearned income	2,631,877		2,697,226
Total loans	32,577,834		31,123,641
Allowance for credit losses on loans	(303,982)		(303,671)
Net loans	32,273,852		30,819,970
Premises and equipment, net	565,607		557,307
Operating lease right-of-use assets	179,284		189,714
Accrued interest receivable	209,503		190,521
Goodwill	1,998,716		1,998,716
Other intangible assets	108,119		126,405
Company-owned life insurance	774,517		768,552
Other assets	1,286,244		1,142,315
Total assets	$	49,059,448	$	46,763,372
Liabilities
Deposits:
Noninterest-bearing demand	$	10,091,352	$	11,930,798
Interest-bearing:
Checking and NOW	7,495,417		8,340,955
Savings	5,296,985		6,326,158
Money market	8,793,218		5,389,139
Time deposits	5,575,704		3,013,780
Total deposits	37,252,676		35,000,830
Federal funds purchased and interbank borrowings	918		581,489
Securities sold under agreements to repurchase	279,061		432,804
Federal Home Loan Bank advances	4,412,576		3,829,018
Other borrowings	863,455		743,003
Operating lease liabilities	199,937		211,964
Accrued expenses and other liabilities	811,288		835,669
Total liabilities	43,819,911		41,634,777
Shareholders’ Equity
Preferred stock, 2,000 shares authorized, 231 shares issued and outstanding	230,500		230,500
Common stock, no par value, $1.00 per share stated value, 600,000 shares authorized,    292,586 and 292,903 shares issued and outstanding, respectively	292,586		292,903
Capital surplus	4,153,977		4,174,265
Retained earnings	1,531,289		1,217,349
Accumulated other comprehensive income (loss), net of tax	(968,815)		(786,422)
Total shareholders’ equity	5,239,537		5,128,595
Total liabilities and shareholders’ equity	$	49,059,448	$	46,763,372

The accompanying notes to consolidated financial statements are an integral part of these statements.

4

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2023		2022		2023		2022
Interest Income
Loans including fees:
Taxable	$	474,387	$	331,271	$	1,334,658	$	800,535
Nontaxable	11,181		6,461		32,318		14,770
Investment securities:
Taxable	66,924		56,765		191,797		145,633
Nontaxable	10,833		11,086		33,039		32,370
Money market and other interest-earning investments	13,194		935		25,258		3,073
Total interest income	576,519		406,518		1,617,070		996,381
Interest Expense
Deposits	147,428		10,820		310,995		19,201
Federal funds purchased and interbank borrowings	910		720		11,404		722
Securities sold under agreements to repurchase	710		106		2,389		287
Federal Home Loan Bank advances	40,382		13,027		123,466		25,915
Other borrowings	12,003		5,256		30,071		13,410
Total interest expense	201,433		29,929		478,325		59,535
Net interest income	375,086		376,589		1,138,745		936,846
Provision for credit losses	19,068		15,490		47,292		133,391
Net interest income after provision for credit losses	356,018		361,099		1,091,453		803,455
Noninterest Income
Wealth and investment services fees	26,687		25,359		80,128		75,183
Service charges on deposit accounts	18,524		20,042		53,278		54,392
Debit card and ATM fees	10,818		10,608		31,453		29,429
Mortgage banking revenue	5,063		5,360		12,628		19,127
Capital markets income	5,891		8,906		19,003		20,609
Company-owned life insurance	3,740		3,361		11,624		11,456
Debt securities gains (losses), net	(241)		(172)		(5,440)		85
Other income	10,456		6,921		30,574		24,461
Total noninterest income	80,938		80,385		233,248		234,742
Noninterest Expense
Salaries and employee benefits	131,541		147,203		404,715		433,167
Occupancy	25,795		26,418		80,162		73,933
Equipment	8,284		7,328		23,394		20,046
Marketing	9,448		10,361		28,698		23,756
Technology	20,592		20,269		59,850		64,914
Communication	4,075		5,392		12,768		14,687
Professional fees	5,956		6,559		19,085		32,686
FDIC assessment	9,000		6,249		29,028		13,523
Amortization of intangibles	6,040		7,089		18,286		19,070
Amortization of tax credit investments	2,644		2,662		8,167		5,703
Property optimization	—		—		1,559		—
Other expense	21,401		22,914		56,359		54,023
Total noninterest expense	244,776		262,444		742,071		755,508
Income before income taxes	192,180		179,040		582,630		282,689
Income tax expense	44,304		38,887		133,118		55,137
Net income	147,876		140,153		449,512		227,552
Preferred dividends	(4,034)		(4,034)		(12,101)		(10,084)
Net income applicable to common shareholders	$	143,842	$	136,119	$	437,411	$	217,468
Net income per common share - basic	$	0.49	$	0.47	$	1.50	$	0.81
Net income per common share - diluted	0.49		0.47		1.50		0.80
Weighted average number of common shares outstanding - basic	290,648		290,961		290,763		269,843
Weighted average number of common shares outstanding - diluted	291,717		292,483		291,809		271,123
Dividends per common share	$	0.14	$	0.14	$	0.42	$	0.42

The accompanying notes to consolidated financial statements are an integral part of these statements.

5

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Net income	$	147,876	$	140,153	$	449,512	$	227,552
Other comprehensive income (loss):
Change in debt securities available-for-sale:
Unrealized holding gains (losses) for the period	(208,626)		(285,798)		(304,061)		(1,019,782)
Reclassification for securities transferred to held-to-maturity	—		—		—		165,473
Reclassification adjustment for securities (gains) losses    realized in income	241		172		5,440		(85)
Income tax effect	51,903		68,356		83,092		202,999
Unrealized gains (losses) on available-for-sale securities	(156,482)		(217,270)		(215,529)		(651,395)
Change in securities held-to-maturity:
Adjustment for securities transferred from available-for-sale	—		—		—		(165,473)
Amortization of unrealized losses on securities transferred     from available-for-sale	5,623		6,772		16,574		10,774
Income tax effect	(1,430)		(1,651)		(2,861)		37,621
Changes from securities held-to-maturity	4,193		5,121		13,713		(117,078)
Change in hedges:
Net unrealized derivative gains (losses) on hedges	(15,574)		(36,755)		45,547		(49,679)
Reclassification adjustment for (gains) losses realized in net    income	4,927		749		(19,893)		(139)
Income tax effect	2,754		8,846		(6,094)		12,240
Changes from hedges	(7,893)		(27,160)		19,560		(37,578)
Change in defined benefit pension plans:
Amortization of net (gains) losses recognized in income	—		(11)		(182)		(32)
Income tax effect	—		3		45		8
Changes from defined benefit pension plans	—		(8)		(137)		(24)
Other comprehensive income (loss), net of tax	(160,182)		(239,317)		(182,393)		(806,075)
Comprehensive income (loss)	$	(12,306)	$	(99,164)	$	267,119	$	(578,523)

The accompanying notes to consolidated financial statements are an integral part of these statements.

6

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

(dollars in thousands, except per    share data)	Preferred Stock		Common Stock		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance, December 31, 2021	$	—	$	165,838	$	1,880,545	$	968,010	$	(2,375)	$	3,012,018
Net income (loss)	—		—		—		(27,586)		—		(27,586)
Other comprehensive income (loss)	—		—		—		—		(335,824)		(335,824)
First Midwest Bancorp, Inc. merger:
Issuance of common stock	—		129,365		2,316,947		—		—		2,446,312
Issuance of preferred stock, net of    issuance costs	230,500		—		13,219		—		—		243,719
Cash dividends:
Common ($0.14 per share)	—		—		—		(40,782)		—		(40,782)
Preferred dividends	—		—		—		(2,017)		—		(2,017)
Common stock issued	—		10		155		—		—		165
Common stock repurchased	—		(3,890)		(66,188)		—		—		(70,078)
Share-based compensation expense	—		—		6,284		—		—		6,284
Stock activity under incentive    compensation plans	—		1,636		(1,368)		(365)		—		(97)
Balance, March 31, 2022	230,500		292,959		4,149,594		897,260		(338,199)		5,232,114
Net income	—		—		—		114,985		—		114,985
Other comprehensive income (loss)	—		—		—		—		(230,934)		(230,934)
Cash dividends:
Common ($0.14 per share)	—		—		—		(40,901)		—		(40,901)
Preferred dividends	—		—		—		(4,033)		—		(4,033)
Common stock issued	—		10		152		—		—		162
Common stock repurchased	—		(21)		(301)		—		—		(322)
Share-based compensation expense	—		—		7,813		—		—		7,813
Stock activity under incentive    compensation plans	—		(55)		285		(331)		—		(101)
Balance, June 30, 2022	230,500		292,893		4,157,543		966,980		(569,133)		5,078,783
Net income	—		—		—		140,153		—		140,153
Other comprehensive income (loss)	—		—		—		—		(239,317)		(239,317)
Cash dividends:
Common ($0.14 per share)	—		—		—		(40,907)		—		(40,907)
Preferred dividends	—		—		—		(4,034)		—		(4,034)
Common stock issued	—		17		213		—		—		230
Common stock repurchased	—		(34)		(497)		—		—		(531)
Share-based compensation expense	—		—		7,485		—		—		7,485
Stock activity under incentive    compensation plans	—		4		1,839		(322)		—		1,521
Balance, September 30, 2022	$	230,500	$	292,880	$	4,166,583	$	1,061,870	$	(808,450)	$	4,943,383

7

OLD NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited) – (Continued)
(dollars in thousands, except per    share data)	Preferred Stock		Common Stock		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance, December 31, 2022	$	230,500	$	292,903	$	4,174,265	$	1,217,349	$	(786,422)	$	5,128,595
Net income	—		—		—		146,600		—		146,600
Other comprehensive income (loss)	—		—		—		—		78,064		78,064
Cash dividends:
Common ($0.14 per share)	—		—		—		(41,088)		—		(41,088)
Preferred dividends	—		—		—		(4,034)		—		(4,034)
Common stock issued	—		15		247		—		—		262
Common stock repurchased	—		(2,598)		(41,112)		—		—		(43,710)
Share-based compensation expense	—		—		12,742		—		—		12,742
Stock activity under incentive    compensation plans	—		1,602		(1,412)		(195)		—		(5)
Balance, March 31, 2023	230,500		291,922		4,144,730		1,318,632		(708,358)		5,277,426
Net income	—		—		—		155,036		—		155,036
Other comprehensive income (loss)	—		—		—		—		(100,275)		(100,275)
Cash dividends:
Common ($0.14 per share)	—		—		—		(40,932)		—		(40,932)
Preferred dividends	—		—		—		(4,033)		—		(4,033)
Common stock issued	—		20		252		—		—		272
Common stock repurchased	—		(8)		(97)		—		—		(105)
Share-based compensation expense	—		—		5,247		—		—		5,247
Stock activity under incentive    compensation plans	—		663		(1,043)		(161)		—		(541)
Balance, June 30, 2023	230,500		292,597		4,149,089		1,428,542		(808,633)		5,292,095
Net income	—		—		—		147,876		—		147,876
Other comprehensive income (loss)	—		—		—		—		(160,182)		(160,182)
Cash dividends:
Common ($0.14 per share)	—		—		—		(40,933)		—		(40,933)
Preferred dividends	—		—		—		(4,034)		—		(4,034)
Common stock issued	—		20		243		—		—		263
Common stock repurchased	—		(31)		(420)		—		—		(451)
Share-based compensation expense	—		—		4,914		—		—		4,914
Stock activity under incentive    compensation plans	—		—		151		(162)		—		(11)
Balance, September 30, 2023	$	230,500	$	292,586	$	4,153,977	$	1,531,289	$	(968,815)	$	5,239,537

The accompanying notes to consolidated financial statements are an integral part of these statements.

8

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Cash Flows From Operating Activities
Net income	$	449,512	$	227,552
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	28,162		26,893
Amortization of other intangible assets	18,286		19,070
Amortization of tax credit investments	8,167		5,703
Net premium amortization on investment securities	8,673		14,625
Accretion income related to acquired loans	(17,484)		(63,472)
Share-based compensation expense	22,903		21,582
Provision for credit losses	47,292		133,391
Debt securities (gains) losses, net	5,440		(85)
Net (gains) losses on sales of loans and other assets	(727)		(5,911)
Increase in cash surrender value of company-owned life insurance	(11,624)		(11,456)
Residential real estate loans originated for sale	(366,340)		(490,288)
Proceeds from sales of residential real estate loans	366,485		531,121
(Increase) decrease in interest receivable	(18,982)		(29,088)
(Increase) decrease in other assets	(56,116)		36,049
Increase (decrease) in accrued expenses and other liabilities	(40,132)		271,625
Net cash flows provided by (used in) operating activities	443,515		687,311
Cash Flows From Investing Activities
Cash received from merger, net	—		1,912,629
Purchases of investment securities available-for-sale	(626,820)		(1,367,896)
Purchases of investment securities held-to-maturity	(1,941)		(156,378)
Purchases of Federal Home Loan Bank/Federal Reserve Bank stock	(99,158)		(115,488)
Purchases of equity securities	(20,862)		(5,843)
Proceeds from maturities, prepayments, and calls of investment securities available-for-sale	614,782		1,117,620
Proceeds from sales of investment securities available-for-sale	54,056		13,371
Proceeds from maturities, prepayments, and calls of investment securities held-to-maturity	76,276		61,172
Proceeds from sales of Federal Home Loan Bank/Federal Reserve Bank stock	47,738		108,697
Proceeds from sales of equity securities	2,610		52,034
Loan originations and payments, net	(2,269,544)		(2,481,620)
Proceeds from sales of commercial loans	679,952		—
Proceeds from company-owned life insurance death benefits	5,865		8,716
Proceeds from sales of premises and equipment and other assets	3,513		3,202
Purchases of premises and equipment and other assets	(28,074)		(28,739)
Net cash flows provided by (used in) investing activities	(1,561,607)		(878,523)
Cash Flows From Financing Activities
Net increase (decrease) in:
Deposits	2,251,846		235,064
Federal funds purchased and interbank borrowings	(580,571)		300,755
Securities sold under agreements to repurchase	(153,743)		(89,416)
Other borrowings	114,251		152,324
Payments for maturities of Federal Home Loan Bank advances	(1,850,150)		(1,674,875)
Proceeds from Federal Home Loan Bank advances	2,450,000		1,450,000
Cash dividends paid	(135,054)		(132,674)
Common stock repurchased	(44,266)		(70,931)
Common stock issued	797		557
Net cash flows provided by (used in) financing activities	2,053,110		170,804
Net increase (decrease) in cash and cash equivalents	935,018		(20,408)
Cash and cash equivalents at beginning of period	728,412		822,019
Cash and cash equivalents at end of period	$	1,663,430	$	801,611

9

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) – (Continued)

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Supplemental cash flow information:
Total interest paid	$	450,939	$	62,207
Total income taxes paid (net of refunds)	158,478		14,759
Common stock issued for merger, net	—		2,446,312
Preferred stock issued for merger, net	—		243,870
Investment securities purchased but not settled	—		3,858
Securities transferred from available-for-sale to held-to-maturity	—		2,986,736
Operating lease right-of-use assets obtained in exchange for lease obligations	7,899		17,376
Finance lease right-of-use assets obtained in exchange for lease obligations	10,019		629

The accompanying notes to consolidated financial statements are an integral part of these statements.

10

OLD NATIONAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned subsidiaries (hereinafter collectively referred to as “Old National”) and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry.  Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of September 30, 2023 and December 31, 2022, and the results of its operations for the three and nine months ended September 30, 2023 and 2022.   Interim results do not necessarily represent annual results. Certain information and disclosures normally included in notes to consolidated annual financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to SEC rules and regulations. These financial statements should be read in conjunction with Old National’s Annual Report on Form 10-K for the year ended December 31, 2022.

All intercompany transactions and balances have been eliminated.  Certain prior year amounts have been reclassified to conform to the current presentation.  Such reclassifications had no effect on prior period net income or shareholders’ equity and were insignificant amounts.

Financial Difficulty Modifications

Any loans that are modified are reviewed by Old National to identify if a financial difficulty modification has occurred, which is when Old National Bank modifies a loan related to a borrower experiencing financial difficulties. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan, an extension of the maturity date, a permanent reduction of the recorded investment of the loan, or an other-than-insignificant payment delay. The adoption of ASU 2022-02 on January 1, 2023 eliminated the recognition and measurement of TDRs and enhanced disclosures for modifications to loans related to borrowers experiencing financial difficulties. See Note 2 to the consolidated financial statements for additional detail regarding the adoption of ASU 2022-02.

Other than the changes for financial difficulty modifications, there have been no material changes from the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Guidance Adopted in 2023

FASB ASC 805 – In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, to address diversity in practice and inconsistency related to the accounting for revenue contracts with customers acquired in a business combination. The amendments require that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Entities should apply the amendments prospectively to business combinations that occur after the effective date. The adoption of this guidance on January 1, 2023 did not have a material impact on the consolidated financial statements.

FASB ASC 815 – In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method and rename the last-of-layer method the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15,

11

2022, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2023 did not have a material impact on the consolidated financial statements.

FASB ASC 326 – In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, to eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The amendments require that an entity disclose current-period gross charge-offs by year of origination for financing receivables and net investment in leases within the vintage disclosures required by ASC 326. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Old National adopted the provision in ASU 2022-02 related to the recognition and measurement of TDRs on a prospective basis on January 1, 2023, which did not have a material impact on the consolidated financial statements.

FASB ASC 848 – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from LIBOR or other interbank offered rate on financial reporting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date of relief provisions within Topic 848 from December 31, 2022 to December 31, 2024. The objective of the guidance in Topic 848 is to provide relief during the transition period.

The amendments in this ASU are effective March 12, 2020 through December 31, 2024. Old National believes the adoption of this guidance on activities subsequent to September 30, 2023 will not have a material impact on the consolidated financial statements.

Accounting Guidance Pending Adoption 

FASB ASC 820 – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

FASB ASC 842 – In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements, which requires all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. Transition can be done either retrospectively or prospectively. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

FASB ASC 323 – In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

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NOTE 3 – ACQUISITION AND DIVESTITURE ACTIVITY

Merger

First Midwest Bancorp, Inc.

On February 15, 2022, Old National completed its previously announced merger of equals transaction with First Midwest pursuant to an agreement and plan of merger, dated as of May 30, 2021, to combine in an all-stock transaction. The combined organization has a presence in additional Midwestern markets, strong commercial banking capabilities, a robust retail footprint, a significant wealth management platform, and an enhanced ability to attract talent. The combined organization also creates the scale and profitability to accelerate digital and technology capabilities to drive future investments in consumer and commercial banking, as well as wealth management services.

As of December 31, 2022, Old National finalized its valuation of all assets acquired and liabilities assumed. Transaction costs totaling $23.2 million associated with the merger have been expensed for the nine months ended September 30, 2023, compared to $100.6 million during the nine months ended September 30, 2022. Additional transaction and integration costs will be expensed in future periods as incurred.

Divestiture

On November 18, 2022, Old National completed its previously announced transaction with UMB, pursuant to which UMB acquired Old National’s business of acting as a qualified custodian for, and administering, health savings accounts. Old National served as custodian for health savings accounts comprised of both investment accounts and deposit accounts. At closing, the health savings accounts held in deposit accounts that were transferred totaled approximately $382 million and the transaction resulted in a $90.7 million pre-tax gain.

Pending Acquisition

CapStar Financial Holdings, Inc.

On October 26, 2023, Old National announced that it entered into a definitive merger agreement pursuant to which Old National will acquire CapStar Financial Holdings, Inc. (“CapStar”) and its wholly-owned subsidiary, CapStar Bank, in an all-stock transaction. This partnership transaction will strengthen Old National’s recently formed Nashville presence and add several new high-growth markets. As of September 30, 2023, CapStar had approximately $3.3 billion of total assets, $2.3 billion of total loans, and $2.8 billion of deposits. Under the terms of the merger agreement, each outstanding share of CapStar common stock will be converted into the right to receive 1.155 shares of Old National common stock, valuing the transaction at approximately $344.4 million, or $16.64 per share, based on Old National’s 30-day volume weighted average closing stock price ending October 25, 2023. The transaction value is likely to change until closing due to fluctuations in the price of Old National common stock. The definitive merger agreement has been approved by the Board of Directors of each company. The transaction remains subject to regulatory approval and the approval of CapStar shareholders. The transaction is anticipated to close in the second quarter of 2024.

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NOTE 4 – NET INCOME PER COMMON SHARE

Basic and diluted net income per common share are calculated using the two-class method.  Net income applicable to common shares is divided by the weighted-average number of common shares outstanding during the period.  Adjustments to the weighted average number of common shares outstanding are made only when such adjustments will dilute net income per common share.  Net income applicable to common shares is then divided by the weighted-average number of common shares and common share equivalents during the period.

The following table presents the calculation of basic and diluted net income per common share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2023		2022		2023		2022
Net income	$	147,876	$	140,153	$	449,512	$	227,552
Preferred dividends	(4,034)		(4,034)		(12,101)		(10,084)
Net income applicable to common shares	$	143,842	$	136,119	$	437,411	$	217,468
Weighted average common shares outstanding:
Weighted average common shares outstanding (basic)	290,648		290,961		290,763		269,843
Effect of dilutive securities:
Restricted stock	1,069		1,516		1,045		1,273
Stock appreciation rights	—		6		1		7
Weighted average diluted shares outstanding	291,717		292,483		291,809		271,123
Basic Net Income Per Common Share	$	0.49	$	0.47	$	1.50	$	0.81
Diluted Net Income Per Common Share	$	0.49	$	0.47	$	1.50	$	0.80

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NOTE 5 – INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolios and the corresponding amounts of gross unrealized gains, unrealized losses, and basis adjustments in AOCI and gross unrecognized gains and losses.

(dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Basis Adjustments (1)		Fair Value
September 30, 2023
Available-for-Sale
U.S. Treasury	$	616,608	$	98	$	(10,258)	$	(58,322)	$	548,126
U.S. government-sponsored entities and agencies	1,475,307		—		(229,113)		(103,294)		1,142,900
Mortgage-backed securities - Agency	4,686,448		17		(823,760)		—		3,862,705
States and political subdivisions	592,495		7		(47,058)		(500)		544,944
Pooled trust preferred securities	13,794		—		(2,669)		—		11,125
Other securities	335,292		112		(30,443)		—		304,961
Total available-for-sale securities	$	7,719,944	$	234	$	(1,143,301)	$	(162,116)	$	6,414,761
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	824,223	$	—	$	(207,213)	$	—	$	617,010
Mortgage-backed securities - Agency	1,043,585		—		(195,933)		—		847,652
States and political subdivisions	1,160,256		—		(231,147)		—		929,109
Allowance for securities held-to-maturity	(150)		—		—		—		(150)
Total held-to-maturity securities	$	3,027,914	$	—	$	(634,293)	$	—	$	2,393,621
December 31, 2022
Available-for-Sale
U.S. Treasury	$	253,148	$	5	$	(5,189)	$	(47,037)	$	200,927
U.S. government-sponsored entities and agencies	1,451,736		—		(169,248)		(107,408)		1,175,080
Mortgage-backed securities - Agency	4,986,354		976		(617,428)		—		4,369,902
States and political subdivisions	688,159		1,789		(26,096)		—		663,852
Pooled trust preferred securities	13,783		—		(2,972)		—		10,811
Other securities	379,423		258		(26,541)		—		353,140
Total available-for-sale securities	$	7,772,603	$	3,028	$	(847,474)	$	(154,445)	$	6,773,712
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	819,168	$	—	$	(162,810)	$	—	$	656,358
Mortgage-backed securities - Agency	1,106,817		—		(123,854)		—		982,963
States and political subdivisions	1,163,312		221		(159,022)		—		1,004,511
Allowance for securities held-to-maturity	(150)		—		—		—		(150)
Total held-to-maturity securities	$	3,089,147	$	221	$	(445,686)	$	—	$	2,643,682

(1)    Basis adjustments represent the cumulative amount of fair value hedging adjustments included in the carrying amounts of fixed-rate investment securities assets designated in fair value hedging arrangements. See Note 15 to the consolidated financial statements for additional information regarding these derivative financial instruments.

Substantially all of the mortgage-backed securities in the investment portfolio are residential mortgage-backed securities.  

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 September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Proceeds	$	28,531	$	5,221	$	111,419	$	78,568
Realized gains	54		17		1,002		528
Realized losses	(295)		(189)		(6,442)		(443)

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The table below shows the amortized cost and fair value of the investment securities portfolio 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.

	September 30, 2023
(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield
Maturity
Available-for-Sale
Within one year	$	539,157	$	535,193	4.71	%
One to five years	1,567,565		1,395,867		2.80
Five to ten years	3,987,461		3,285,183		2.37
Beyond ten years	1,625,761		1,198,518		2.46
Total	$	7,719,944	$	6,414,761	2.64	%
Held-to-Maturity
One to five years	$	161,837	$	127,716	2.68	%
Five to ten years	954,756		797,284		2.64
Beyond ten years	1,911,321		1,468,621		2.71
Total	$	3,027,914	$	2,393,621	2.69	%

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 months				12 months or longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2023
Available-for-Sale
U.S. Treasury	$	37,492	$	(144)	$	178,540	$	(10,114)	$	216,032	$	(10,258)
U.S. government-sponsored entities    and agencies	32,821		(58)		1,110,079		(229,055)		1,142,900		(229,113)
Mortgage-backed securities - Agency	124,895		(5,798)		3,736,306		(817,962)		3,861,201		(823,760)
States and political subdivisions	258,362		(7,749)		260,563		(39,309)		518,925		(47,058)
Pooled trust preferred securities	—		—		11,125		(2,669)		11,125		(2,669)
Other securities	11,737		(323)		262,912		(30,120)		274,649		(30,443)
Total available-for-sale	$	465,307	$	(14,072)	$	5,559,525	$	(1,129,229)	$	6,024,832	$	(1,143,301)
December 31, 2022
Available-for-Sale
U.S. Treasury	$	130,967	$	(3,264)	$	66,992	$	(1,925)	$	197,959	$	(5,189)
U.S. government-sponsored entities    and agencies	454,854		(75,795)		720,226		(93,453)		1,175,080		(169,248)
Mortgage-backed securities - Agency	3,207,319		(358,507)		1,116,205		(258,921)		4,323,524		(617,428)
States and political subdivisions	414,813		(25,555)		2,703		(541)		417,516		(26,096)
Pooled trust preferred securities	—		—		10,811		(2,972)		10,811		(2,972)
Other securities	257,775		(17,045)		75,309		(9,496)		333,084		(26,541)
Total available-for-sale	$	4,465,728	$	(480,166)	$	1,992,246	$	(367,308)	$	6,457,974	$	(847,474)

16

The following table summarizes the held-to-maturity investment securities with unrecognized losses aggregated by major security type and length of time in a continuous loss position:

	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
September 30, 2023
Held-to-Maturity
U.S. government-sponsored entities    and agencies	$	—	$	—	$	617,010	$	(207,213)	$	617,010	$	(207,213)
Mortgage-backed securities - Agency	—		—		847,652		(195,933)		847,652		(195,933)
States and political subdivisions	64,441		(4,877)		864,668		(226,270)		929,109		(231,147)
Total held-to-maturity	$	64,441	$	(4,877)	$	2,329,330	$	(629,416)	$	2,393,771	$	(634,293)
December 31, 2022
Held-to-Maturity
U.S. government-sponsored entities    and agencies	$	354,293	$	(110,523)	$	302,066	$	(52,287)	$	656,359	$	(162,810)
Mortgage-backed securities - Agency	367,849		(42,438)		615,114		(81,416)		982,963		(123,854)
States and political subdivisions	838,689		(127,355)		135,573		(31,667)		974,262		(159,022)
Total held-to-maturity	$	1,560,831	$	(280,316)	$	1,052,753	$	(165,370)	$	2,613,584	$	(445,686)

The unrecognized losses on held-to-maturity investment securities presented in the table above do not include unrecognized losses on securities that were transferred from available-for-sale to held-to-maturity totaling $132.3 million at September 30, 2023 and $148.9 million at December 31, 2022. These unrecognized losses are included as a separate component of shareholders’ equity and are being amortized over the remaining term of the securities.

No allowance for credit losses on available-for-sale debt securities was needed at September 30, 2023 or December 31, 2022.

An allowance on held-to-maturity debt securities is maintained for certain municipal bonds to account for expected lifetime credit losses. Substantially all of the U.S. government-sponsored entities and agencies and agency mortgage-backed securities 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. The allowance for credit losses on held-to-maturity debt securities was $0.2 million at September 30, 2023 and December 31, 2022.

Accrued interest receivable on the securities portfolio is excluded from the estimate of credit losses and totaled $38.0 million at September 30, 2023 and $50.9 million at December 31, 2022.

At September 30, 2023, Old National’s securities portfolio consisted of 3,007 securities, 2,917 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 and temporary market movements.  Old National’s pooled trust preferred securities are evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows.  At September 30, 2023, 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.

Old National’s two pooled trust preferred securities with fair values totaling $11.1 million and unrealized losses totaling $2.7 million 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. Old National did not recognize any losses on these securities for the nine months ended September 30, 2023 or 2022.

Equity Securities

Equity securities consist of mutual funds for Community Reinvestment Act qualified investments and diversified investment securities held in a grantor trust for participants in the Company’s nonqualified deferred compensation plan. Old National’s equity securities with readily determinable fair values totaled $69.9 million at September 30,

17

2023 and $52.5 million at December 31, 2022.  There were losses on equity securities of $0.8 million during the three months ended September 30, 2023 and losses of $1.4 million during the nine months ended September 30, 2023, compared to losses of $0.7 million and $4.9 million during the three and nine months ended September 30, 2022, respectively.

Alternative Investments

Old National has alternative investments without readily determinable fair values that are included in other assets totaling $418.3 million at September 30, 2023, consisting of $242.3 million of illiquid investments in partnerships, limited liability companies, and other ownership interests that support affordable housing and $176.0 million of economic development and community revitalization initiatives in low-to-moderate income neighborhoods. These alternative investments totaled $396.8 million at December 31, 2022.  There have been no impairments or adjustments on equity securities without readily determinable fair values, except for amortization of tax credit investments in the nine months ended September 30, 2023 and 2022. See Note 9 to the consolidated financial statements for detail regarding these investments.

NOTE 6 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans

Old National’s loans consist primarily of loans made to consumers and commercial clients in many diverse industries, including real estate rental and leasing, manufacturing, healthcare, wholesale trade, construction, and agriculture, among others.  Most of Old National’s lending activity occurs within our principal geographic markets in the Midwest region.  Old National manages concentrations of credit exposure by industry, product, geography, client relationship, and loan size.

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The loan categories used to monitor and analyze interest income and yields are different than the portfolio segments used to determine the allowance for credit losses on loans. The allowance for credit losses was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. The four loan portfolios used to monitor and analyze interest income and yields – commercial, commercial real estate, residential real estate, and consumer – are reclassified into seven segments of loans – commercial, commercial real estate, BBCC, residential real estate, indirect, direct, and home equity for purposes of determining the allowance for credit losses on loans. The commercial and commercial real estate loan categories shown on the balance sheet include the same pool of loans as the commercial, commercial real estate, and BBCC portfolio segments. The consumer loan category shown on the balance sheet is comprised of the same loans in the indirect, direct, and home equity portfolio segments. The portfolio segment reclassifications follow:

	Balance Sheet Line Item		Portfolio Segment Reclassifications		After Reclassifications
(dollars in thousands)
September 30, 2023
Loans:
Commercial	$	9,333,448	$	(226,353)	$	9,107,095
Commercial real estate	13,916,221		(165,593)		13,750,628
BBCC	N/A		391,946		391,946
Residential real estate	6,696,288		—		6,696,288
Consumer	2,631,877		(2,631,877)		N/A
Indirect	N/A		1,047,224		1,047,224
Direct	N/A		542,689		542,689
Home equity	N/A		1,041,964		1,041,964
Total	$	32,577,834	$	—	$	32,577,834
December 31, 2022
Loans:
Commercial	$	9,508,904	$	(210,280)	$	9,298,624
Commercial real estate	12,457,070		(158,322)		12,298,748
BBCC	N/A		368,602		368,602
Residential real estate	6,460,441		—		6,460,441
Consumer	2,697,226		(2,697,226)		N/A
Indirect	N/A		1,034,257		1,034,257
Direct	N/A		629,186		629,186
Home equity	N/A		1,033,783		1,033,783
Total	$	31,123,641	$	—	$	31,123,641

The composition of loans by portfolio segment follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Commercial (1)	$	9,107,095	$	9,298,624
Commercial real estate	13,750,628		12,298,748
BBCC	391,946		368,602
Residential real estate	6,696,288		6,460,441
Indirect	1,047,224		1,034,257
Direct	542,689		629,186
Home equity	1,041,964		1,033,783
Total loans	32,577,834		31,123,641
Allowance for credit losses on loans	(303,982)		(303,671)
Net loans	$	32,273,852	$	30,819,970

(1)Includes direct finance leases of $173.0 million at September 30, 2023 and $188.1 million at December 31, 2022.

19

The risk characteristics of each loan portfolio segment are as follows:

Commercial

Commercial loans are classified primarily on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower.  The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value.  Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some loans may be made on an unsecured basis.  In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its clients.

Commercial Real Estate

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan.  Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy.  The properties securing Old National’s commercial real estate portfolio are diverse in terms of type and geographic location.  Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.

Included with commercial real estate are construction loans, which are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, financial analysis of the developers and property owners, and feasibility studies, if available.  Construction loans are generally based on estimates of costs and value associated with the complete project.  These estimates may be inaccurate.  Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project.  Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders (including Old National), sales of developed property, or an interim loan commitment from Old National until permanent financing is obtained.  These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

At 245%, Old National Bank’s applicable investor commercial real estate loans as a percentage of its risk-based capital remained below the regulatory guideline limit of 300% at September 30, 2023.

BBCC

BBCC loans are typically granted to small businesses with gross revenues of less than $5 million and aggregate debt of less than $1 million. Old National has established minimum debt service coverage ratios, minimum FICO scores for owners and guarantors, and the ability to show relatively stable earnings as criteria to help mitigate risk. Repayment of these loans depends on the personal income of the borrowers and the cash flows of the business. These factors can be affected by factors such as changes in economic conditions and unemployment levels.

Residential

With respect to residential loans that are secured by 1 - 4 family residences and are generally owner occupied, Old National typically establishes a maximum loan-to-value ratio and generally requires private mortgage insurance if that ratio is exceeded.  Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels.  Repayment can also be impacted by changes in residential property values.  Portfolio risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Indirect

Indirect loans are secured by automobile collateral, generally new and used cars and trucks from auto dealers that operate within our footprint. Old National typically mitigates the risk of indirect loans by establishing minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions

20

such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers, conservative credit policies, and ongoing reviews of dealer relationships.

Direct

Direct loans are typically secured by collateral such as auto or real estate or are unsecured. Old National has established conservative underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers along with conservative credit policies.

Home Equity

Home equity loans are generally secured by 1 - 4 family residences that are owner occupied. Old National has established conservative underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers, along with conservative credit policies as well as monitoring of updated borrower credit scores.

Allowance for Credit Losses

Loans

Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses on loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in underwriting new loans and in our process for estimating expected credit losses. Expected credit loss inherent in non-cancelable off-balance-sheet credit exposures is accounted for as a separate liability included in other liabilities on the balance sheet. The allowance for credit losses on loans held for investment is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Old National has made a policy election to report accrued interest receivable as a separate line item on the balance sheet. Accrued interest receivable on loans is excluded from the estimate of credit losses and totaled $162.8 million at September 30, 2023 and $137.7 million at December 31, 2022.

The allowance for credit loss estimation process involves procedures to appropriately consider the unique characteristics of our loan portfolio segments. These segments are further disaggregated into loan classes based on the level at which credit risk is monitored. When computing the level of expected credit losses, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status, and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods.

The allowance level is influenced by loan volumes, loan AQR migration or delinquency status, changes in historical loss experience, and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and second, a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics.

21

The base forecast scenario considers unemployment, gross domestic product, and the BBB ratio (BBB spread to the 10-year U.S. Treasury rate). In addition to the quantitative inputs, several qualitative factors are considered. These factors include the risk that unemployment, gross domestic product, housing product index, and the BBB ratio prove to be more severe and/or prolonged than our baseline forecast due to a variety of factors including monetary actions to control inflation, recent instability in the banking sector, conflict in Ukraine, and global supply chain issues. Old National’s activity in the allowance for credit losses on loans by portfolio segment was as follows:

(dollars in thousands)	Balance at Beginning of Period		Allowance Established for Acquired PCD Loans		Charge-offs		Recoveries		Provision for Loan Losses		Balance at End of Period
Three Months Ended September 30, 2023
Commercial	$	127,403	$	—	$	(16,705)	$	1,616	$	12,441	$	124,755
Commercial real estate	136,897		—		(2,291)		102		10,267		144,975
BBCC	2,776		—		(1,049)		70		912		2,709
Residential real estate	20,421		—		(15)		28		346		20,780
Indirect	1,407		—		(490)		325		79		1,321
Direct	4,755		—		(2,180)		580		416		3,571
Home equity	6,896		—		(20)		341		(1,346)		5,871
Total	$	300,555	$	—	$	(22,750)	$	3,062	$	23,115	$	303,982
Three Months Ended September 30, 2022
Commercial	$	102,819	$	3,740	$	(2,696)	$	2,206	$	6,344	$	112,413
Commercial real estate	141,802		6,818		(4,772)		287		(45)		144,090
BBCC	2,064		—		—		108		(4)		2,168
Residential real estate	19,729		—		(20)		66		1,481		21,256
Indirect	1,641		—		(624)		379		189		1,585
Direct	14,412		—		(3,299)		442		4,541		16,096
Home equity	5,536		—		(29)		357		(1,218)		4,646
Total	$	288,003	$	10,558	$	(11,440)	$	3,845	$	11,288	$	302,254
Nine Months Ended September 30, 2023
Commercial	$	120,612	$	—	$	(37,459)	$	3,713	$	37,889	$	124,755
Commercial real estate	138,244		—		(5,938)		1,394		11,275		144,975
BBCC	2,431		—		(1,171)		174		1,275		2,709
Residential real estate	21,916		—		(256)		153		(1,033)		20,780
Indirect	1,532		—		(2,089)		1,349		529		1,321
Direct	12,116		—		(8,018)		1,798		(2,325)		3,571
Home equity	6,820		—		(330)		471		(1,090)		5,871
Total	$	303,671	$	—	$	(55,261)	$	9,052	$	46,520	$	303,982
Nine Months Ended September 30, 2022
Commercial	$	27,232	$	38,780	$	(5,919)	$	3,219	$	49,101	$	112,413
Commercial real estate	64,004		49,419		(5,596)		789		35,474		144,090
BBCC	2,458		—		(48)		256		(498)		2,168
Residential real estate	9,347		136		(344)		636		11,481		21,256
Indirect	1,743		—		(1,636)		921		557		1,585
Direct	528		31		(6,550)		1,712		20,375		16,096
Home equity	2,029		723		(107)		540		1,461		4,646
Total	$	107,341	$	89,089	$	(20,200)	$	8,073	$	117,951	$	302,254

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Unfunded Loan Commitments

Old National maintains an allowance for credit losses on unfunded loan commitments to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses on loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet within accrued expenses and other liabilities, while the corresponding provision for unfunded loan commitments is included in the provision for credit losses. Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Allowance for credit losses on unfunded loan commitments:
Balance at beginning of period	$	37,007	$	21,966	$	32,188	$	10,879
Provision for credit losses on unfunded loan commitments    acquired during the period	—		—		—		11,013
(Recapture of) provision for credit losses on unfunded loan    commitments	(4,047)		4,203		772		4,277
Balance at end of period	$	32,960	$	26,169	$	32,960	$	26,169

Credit Quality

Old National’s management monitors the credit quality of its loans on an ongoing basis with the AQR for commercial loans reviewed annually or at renewal and the performance of its residential and consumer loans based upon the accrual status refreshed at least quarterly.  Internally, management assigns an AQR to each non-homogeneous commercial, commercial real estate, and BBCC loan in the portfolio.  The primary determinants of the AQR are the reliability of the primary source of repayment and the past, present, and projected financial condition of the borrower.  The AQR will also consider current industry conditions.  Major factors used in determining the AQR can vary based on the nature of the loan, but commonly include factors such as debt service coverage, internal cash flow, liquidity, leverage, operating performance, debt burden, FICO scores, occupancy, interest rate sensitivity, and expense burden.  Old National uses the following definitions for risk ratings:

Criticized.  Special mention loans that have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Classified – Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Classified – Nonaccrual.  Loans classified as nonaccrual have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection in full, on the basis of currently existing facts, conditions, and values, in doubt.

Classified – Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as nonaccrual, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Pass rated loans are those loans that are other than criticized, classified – substandard, classified – nonaccrual, or classified – doubtful.

23

The following table summarizes the amortized cost of term loans by risk category of commercial, commercial real estate, and BBCC loans by loan portfolio segment, class of loan, and origination year:

(dollars in thousands)	Origination Year														Revolving to Term
	2023		2022		2021		2020		2019		Prior		Revolving				Total
September 30, 2023
Commercial:
Pass	$	1,615,716	$	1,690,168	$	1,095,758	$	553,187	$	479,907	$	501,610	$	2,000,147	$	454,995	$	8,391,488
Criticized	27,469		110,893		21,107		46,241		22,674		54,738		107,105		32,247		422,474
Classified:
Substandard	19,509		40,694		32,135		38,892		9,970		20,431		66,977		15,417		244,025
Nonaccrual	—		5,748		2,034		284		2,718		—		—		—		10,784
Doubtful	—		18,838		5,626		1,762		962		11,136		—		—		38,324
Total	$	1,662,694	$	1,866,341	$	1,156,660	$	640,366	$	516,231	$	587,915	$	2,174,229	$	502,659	$	9,107,095
Commercial real estate:
Pass	$	1,805,852	$	3,432,536	$	2,715,562	$	1,734,359	$	1,117,895	$	1,273,742	$	73,590	$	796,442	$	12,949,978
Criticized	58,440		62,461		42,128		28,716		27,978		90,549		9,959		21,023		341,254
Classified:
Substandard	21,214		84,269		23,589		16,822		78,165		41,313		—		50,424		315,796
Nonaccrual	—		2,983		11,470		1,428		52		11,385		—		792		28,110
Doubtful	—		1,649		33,564		4,142		38,199		37,936		—		—		115,490
Total	$	1,885,506	$	3,583,898	$	2,826,313	$	1,785,467	$	1,262,289	$	1,454,925	$	83,549	$	868,681	$	13,750,628
BBCC:
Pass	$	74,658	$	76,281	$	49,463	$	42,980	$	30,085	$	14,488	$	66,281	$	18,582	$	372,818
Criticized	2,295		2,469		1,114		76		1,110		—		2,470		2,264		11,798
Classified:
Substandard	98		733		619		24		401		1,196		100		438		3,609
Nonaccrual	216		451		310		340		—		87		477		278		2,159
Doubtful	—		865		492		50		67		88		—		—		1,562
Total	$	77,267	$	80,799	$	51,998	$	43,470	$	31,663	$	15,859	$	69,328	$	21,562	$	391,946

(dollars in thousands)	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Commercial:
Pass	$	2,388,618	$	1,754,364	$	796,340	$	738,208	$	362,986	$	388,617	$	1,988,763	$	329,119	$	8,747,015
Criticized	40,856		30,661		63,557		33,490		9,195		5,312		61,036		4,327		248,434
Classified:
Substandard	37,223		47,522		16,540		22,925		4,844		21,204		67,402		25,143		242,803
Nonaccrual	3,627		1,453		566		—		—		—		1,634		6,623		13,903
Doubtful	2,821		17,604		3,720		8,005		5,968		8,351		—		—		46,469
Total	$	2,473,145	$	1,851,604	$	880,723	$	802,628	$	382,993	$	423,484	$	2,118,835	$	365,212	$	9,298,624
Commercial real estate:
Pass	$	3,066,960	$	2,828,758	$	1,989,000	$	1,219,025	$	675,572	$	1,018,719	$	57,818	$	689,553	$	11,545,405
Criticized	75,306		34,422		22,569		82,637		86,504		56,864		—		23,282		381,584
Classified:
Substandard	46,231		16,928		24,319		78,468		57,824		21,591		—		4,108		249,469
Nonaccrual	3,151		9,541		5,014		—		2,312		22,155		—		3,257		45,430
Doubtful	1,934		38,386		10,011		4,605		1,523		20,401		—		—		76,860
Total	$	3,193,582	$	2,928,035	$	2,050,913	$	1,384,735	$	823,735	$	1,139,730	$	57,818	$	720,200	$	12,298,748
BBCC:
Pass	$	90,341	$	64,161	$	52,304	$	36,868	$	23,618	$	11,333	$	60,016	$	18,881	$	357,522
Criticized	1,504		525		368		692		353		—		1,006		1,603		6,051
Classified:
Substandard	811		143		—		421		—		—		543		682		2,600
Nonaccrual	42		37		118		—		429		284		—		639		1,549
Doubtful	40		107		439		157		64		73		—		—		880
Total	$	92,738	$	64,973	$	53,229	$	38,138	$	24,464	$	11,690	$	61,565	$	21,805	$	368,602

24

For residential real estate and consumer loan classes, Old National evaluates credit quality based on the aging status of the loan and by payment activity.  The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost of term residential real estate and consumer loans based on payment activity and origination year:

	Origination Year														Revolving to Term
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving				Total
September 30, 2023
Residential real estate:
Risk Rating:
Performing	$	362,518	$	1,504,933	$	1,861,729	$	1,732,039	$	444,411	$	750,037	$	—	$	279	$	6,655,946
Nonperforming	—		3,529		2,905		4,538		3,343		26,027		—		—		40,342
Total	$	362,518	$	1,508,462	$	1,864,634	$	1,736,577	$	447,754	$	776,064	$	—	$	279	$	6,696,288
Indirect:
Risk Rating:
Performing	$	309,220	$	390,012	$	181,235	$	96,148	$	46,877	$	19,666	$	—	$	196	$	1,043,354
Nonperforming	120		1,270		1,175		604		361		340		—		—		3,870
Total	$	309,340	$	391,282	$	182,410	$	96,752	$	47,238	$	20,006	$	—	$	196	$	1,047,224
Direct:
Risk Rating:
Performing	$	84,749	$	99,625	$	107,539	$	54,070	$	35,065	$	87,207	$	63,877	$	4,852	$	536,984
Nonperforming	87		486		522		403		316		3,874		6		11		5,705
Total	$	84,836	$	100,111	$	108,061	$	54,473	$	35,381	$	91,081	$	63,883	$	4,863	$	542,689
Home equity:
Risk Rating:
Performing	$	1	$	692	$	387	$	690	$	743	$	5,736	$	994,797	$	23,918	$	1,026,964
Nonperforming	—		24		219		203		758		4,810		1,692		7,294		15,000
Total	$	1	$	716	$	606	$	893	$	1,501	$	10,546	$	996,489	$	31,212	$	1,041,964

	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Residential real estate:
Risk Rating:
Performing	$	1,327,168	$	1,945,792	$	1,825,762	$	478,529	$	136,260	$	712,175	$	7	$	88	$	6,425,781
Nonperforming	59		529		861		873		1,826		30,512		—		—		34,660
Total	$	1,327,227	$	1,946,321	$	1,826,623	$	479,402	$	138,086	$	742,687	$	7	$	88	$	6,460,441
Indirect:
Risk Rating:
Performing	$	504,410	$	249,407	$	144,265	$	82,304	$	31,484	$	19,095	$	—	$	62	$	1,031,027
Nonperforming	348		1,074		645		531		304		328		—		—		3,230
Total	$	504,758	$	250,481	$	144,910	$	82,835	$	31,788	$	19,423	$	—	$	62	$	1,034,257
Direct:
Risk Rating:
Performing	$	132,934	$	164,126	$	77,406	$	57,919	$	45,299	$	59,212	$	87,622	$	671	$	625,189
Nonperforming	115		851		614		205		327		1,526		5		354		3,997
Total	$	133,049	$	164,977	$	78,020	$	58,124	$	45,626	$	60,738	$	87,627	$	1,025	$	629,186
Home equity:
Risk Rating:
Performing	$	919	$	896	$	1,849	$	1,497	$	983	$	11,646	$	990,001	$	14,792	$	1,022,583
Nonperforming	166		160		166		446		794		4,308		1,698		3,462		11,200
Total	$	1,085	$	1,056	$	2,015	$	1,943	$	1,777	$	15,954	$	991,699	$	18,254	$	1,033,783

25

The following table summarizes the gross charge-offs of loans by loan portfolio segment and origination year:

	Origination Year
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Three Months Ended September 30, 2023
Commercial	$	—	$	4,154	$	12,271	$	—	$	—	$	63	$	217	$	16,705
Commercial real estate	—		—		—		1,744		—		547		—		2,291
BBCC	499		501		49		—		—		—		—		1,049
Residential real estate	—		—		—		—		—		15		—		15
Indirect	75		276		86		12		10		31		—		490
Direct	19		429		423		112		270		60		867		2,180
Home equity	—		—		—		—		—		20		—		20
Total gross charge-offs	$	593	$	5,360	$	12,829	$	1,868	$	280	$	736	$	1,084	$	22,750
Nine Months Ended September 30, 2023
Commercial	$	—	$	6,254	$	23,432	$	120	$	6,789	$	302	$	562	$	37,459
Commercial real estate	—		54		735		2,144		—		3,005		—		5,938
BBCC	499		548		77		47		—		—		—		1,171
Residential real estate	—		—		—		—		—		256		—		256
Indirect	85		954		640		153		137		120		—		2,089
Direct	19		1,330		1,805		570		1,011		450		2,833		8,018
Home equity	—		—		—		—		—		330		—		330
Total gross charge-offs	$	603	$	9,140	$	26,689	$	3,034	$	7,937	$	4,463	$	3,395	$	55,261

Nonaccrual and Past Due Loans

Old National does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.

The following table presents the aging of the amortized cost basis in past due loans by class of loans:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Current		Total Loans
September 30, 2023
Commercial	$	2,754	$	4,214	$	12,504	$	19,472	$	9,087,623	$	9,107,095
Commercial real estate	15,954		6,295		21,366		43,615		13,707,013		13,750,628
BBCC	1,273		511		712		2,496		389,450		391,946
Residential	29,762		6,784		12,733		49,279		6,647,009		6,696,288
Indirect	5,576		1,368		1,156		8,100		1,039,124		1,047,224
Direct	3,626		1,059		1,588		6,273		536,416		542,689
Home equity	5,840		1,808		6,077		13,725		1,028,239		1,041,964
Total	$	64,785	$	22,039	$	56,136	$	142,960	$	32,434,874	$	32,577,834
December 31, 2022
Commercial	$	14,147	$	4,801	$	11,080	$	30,028	$	9,268,596	$	9,298,624
Commercial real estate	47,240		1,312		32,892		81,444		12,217,304		12,298,748
BBCC	730		365		603		1,698		366,904		368,602
Residential	24,181		5,033		11,753		40,967		6,419,474		6,460,441
Indirect	6,302		2,118		958		9,378		1,024,879		1,034,257
Direct	5,404		2,118		1,928		9,450		619,736		629,186
Home equity	6,585		1,966		4,707		13,258		1,020,525		1,033,783
Total	$	104,589	$	17,713	$	63,921	$	186,223	$	30,937,418	$	31,123,641

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The following table presents the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing by class of loan:

	September 30, 2023						December 31, 2022
(dollars in thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or More and Accruing		Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or More and Accruing
Commercial	$	49,108	$	13,432	$	577	$	60,372	$	7,873	$	152
Commercial real estate	143,600		29,721		104		122,290		33,445		—
BBCC	3,721		—		—		2,429		—		—
Residential	40,342		—		—		34,660		—		1,808
Indirect	3,870		—		54		3,230		—		28
Direct	5,705		—		109		3,997		—		133
Home equity	15,000		—		348		11,200		—		529
Total	$	261,346	$	43,153	$	1,192	$	238,178	$	41,318	$	2,650

Interest income recognized on nonaccrual loans was insignificant during the three and nine months ended September 30, 2023 and 2022.

When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter-over-quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of collateral dependent loans by class of loan:

	Type of Collateral
(dollars in thousands)	Real Estate		Blanket Lien		Investment Securities/Cash		Auto		Other
September 30, 2023
Commercial	$	13,635	$	31,856	$	466	$	288	$	347
Commercial real estate	131,826		—		1,205		—		6,184
BBCC	2,131		1,174		—		416		—
Residential	40,342		—		—		—		—
Indirect	—		—		—		3,870		—
Direct	4,622		1		3		296		31
Home equity	15,000		—		—		—		—
Total loans	$	207,556	$	33,031	$	1,674	$	4,870	$	6,562
December 31, 2022
Commercial	$	8,962	$	42,754	$	2,690	$	1,611	$	980
Commercial real estate	108,871		—		1,718		—		6,411
BBCC	1,939		478		—		12		—
Residential	34,660		—		—		—		—
Indirect	—		—		—		3,230		—
Direct	2,991		13		—		232		23
Home equity	11,200		—		—		—		—
Total loans	$	168,623	$	43,245	$	4,408	$	5,085	$	7,414

Loan Participations

Old National has loan participations, which qualify as participating interests, with other financial institutions.  At September 30, 2023, these loans totaled $2.8 billion, of which $1.2 billion had been sold to other financial institutions and $1.6 billion was retained by Old National.  The loan participations convey proportionate ownership rights with equal priority to each participating interest holder; involve no recourse (other than ordinary representations and warranties) to, or subordination by, any participating interest holder; all cash flows are divided among the participating interest holders in proportion to each holder’s share of ownership; and no holder has the right to pledge the entire financial asset unless all participating interest holders agree.

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Financial Difficulty Modifications

Occasionally, Old National modifies loans to borrowers experiencing financial difficulty in the form of principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction (or a combination thereof). When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses on loans.

The following table presents the amortized cost basis of financial difficulty modifications at September 30, 2023 that were modified during the three and nine months ended September 30, 2023 by class of loans and type of modification:

(dollars in thousands)	Term Extension		Total Class of Loans
Three Months Ended September 30, 2023
Commercial	$	3,502	0.0	%
Commercial real estate	93,844		0.7	%
Total	$	97,346	0.3	%
Nine Months Ended September 30, 2023
Commercial	$	20,811	0.2	%
Commercial real estate	116,580		0.8	%
Total	$	137,391	0.4	%

Old National closely monitors the performance of financial difficulty modifications to understand the effectiveness of its efforts. The following table presents the performance of loans identified as financial difficulty modifications at September 30, 2023:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Current		Total Loans
September 30, 2023
Commercial	$	—	$	—	$	2,541	$	2,541	$	18,270	$	20,811
Commercial real estate	1,086		—		—		1,086		115,494		116,580
Total	$	1,086	$	—	$	2,541	$	3,627	$	133,764	$	137,391

The following table summarizes the nature of the financial difficulty modifications during the three and nine months ended September 30, 2023 by class of loans:

(dollars in thousands)	Weighted- Average Term Extension (in months)
Three Months Ended September 30, 2023
Commercial	7.3
Commercial real estate	9.2
Total	9.2
Nine Months Ended September 30, 2023
Commercial	5.7
Commercial real estate	8.9
Total	8.4

There were no payment defaults on these loans subsequent to their modifications during the three and nine months ended September 30, 2023. At September 30, 2023, Old National had not committed to lend any material additional funds to the borrowers whose loans were modified due to financial difficulties.

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NOTE 7 – LEASES

Old National has operating and finance leases for land, office space, banking centers, and equipment.  These leases are generally for periods of 5 to 20 years with various renewal options.  We include certain renewal options in the measurement of our right-of-use assets and lease liabilities if they are reasonably certain to be exercised.  Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred.  Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.

Old National has lease agreements with lease and non-lease components, which are generally accounted for separately.  For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.  For certain equipment leases, Old National accounts for the lease and non-lease components as a single lease component using the practical expedient available for that class of assets. Old National does not have any material sub-lease agreements.

The components of lease expense were as follows:

	Affected Line Item in the Statement of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Operating lease cost	Occupancy/Equipment expense	$	7,462	$	7,657	$	23,569	$	21,323
Finance lease cost:
Amortization of right-of-use assets	Occupancy expense	742		680		2,170		2,003
Interest on lease liabilities	Interest expense	183		105		536		315
Sub-lease income	Occupancy expense	(119)		(87)		(281)		(389)
Total		$	8,268	$	8,355	$	25,994	$	23,252

Supplemental balance sheet information related to leases was as follows:

(dollars in thousands)	September 30, 2023			December 31, 2022
Operating Leases
Operating lease right-of-use assets	$	179,284		$	189,714
Operating lease liabilities	199,937			211,964
Finance Leases
Premises and equipment, net	20,571			10,799
Other borrowings	21,595			13,469
Weighted-Average Remaining Lease Term (in Years)
Operating leases	8.5			9.1
Finance leases	10.6			7.2
Weighted-Average Discount Rate
Operating leases	2.93		%	2.88		%
Finance leases	3.89		%	3.30		%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,766	$	22,223
Operating cash flows from finance leases	536		315
Financing cash flows from finance leases	1,893		1,839

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The following table presents a maturity analysis of the Company’s lease liability by lease classification at September 30, 2023:

(dollars in thousands)	Operating Leases		Finance Leases
2023	$	7,959	$	826
2024	31,183		3,357
2025	29,564		3,380
2026	28,622		2,154
2027	27,662		2,157
Thereafter	102,282		14,809
Total undiscounted lease payments	227,272		26,683
Amounts representing interest	(27,335)		(5,088)
Lease liability	$	199,937	$	21,595

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents the changes in the carrying amount of goodwill:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Balance at beginning of period	$	1,998,716	$	1,991,534	$	1,998,716	$	1,036,994
Acquisitions and adjustments	—		11,065		—		965,605
Balance at end of period	$	1,998,716	$	2,002,599	$	1,998,716	$	2,002,599

The increase in goodwill for the three and nine months ended September 30, 2022 was due to the First Midwest merger. See Note 3 to the consolidated financial statements for additional detail regarding this transaction.

Old National performed the required annual goodwill impairment test as of August 31, 2023 and concluded that there was no impairment.  No events or circumstances since the August 31, 2023 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists.

The gross carrying amounts and accumulated amortization of other intangible assets were as follows: 

(dollars in thousands)	Gross Carrying Amount		Accumulated Amortization and Impairment		Net Carrying Amount
September 30, 2023
Core deposit	$	143,511	$	(68,312)	$	75,199
Customer trust relationships	52,621		(19,701)		32,920
Total other intangible assets	$	196,132	$	(88,013)	$	108,119
December 31, 2022
Core deposit	$	170,642	$	(80,951)	$	89,691
Customer trust relationships	56,243		(19,529)		36,714
Total other intangible assets	$	226,885	$	(100,480)	$	126,405

Other intangible assets consist of core deposit intangibles and customer relationship intangibles and are being amortized primarily on an accelerated basis over their estimated useful lives, generally over a period of 5 to 15 years.

Old National reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. No impairment charges were recorded during the nine months ended September 30, 2023 or 2022.  Total amortization expense associated with intangible assets was

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$6.0 million and $18.3 million for the three and nine months ended September 30, 2023, respectively, compared to $7.1 million and $19.1 million for the three and nine months ended September 30, 2022, respectively.

Estimated amortization expense for future years is as follows:

(dollars in thousands)
2023 remaining	$	5,869
2024	21,239
2025	18,358
2026	15,555
2027	12,867
Thereafter	34,231
Total	$	108,119

NOTE 9 – QUALIFIED AFFORDABLE HOUSING PROJECTS AND OTHER TAX CREDIT INVESTMENTS

Old National is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects.  These investments are included in other assets on the balance sheet, with any unfunded commitments included with other liabilities. As of September 30, 2023, Old National expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

The following table summarizes Old National’s investments in qualified affordable housing projects and other tax credit investments:

(dollars in thousands)		September 30, 2023				December 31, 2022
Investment	Accounting Method	Investment		Unfunded Commitment (1)		Investment		Unfunded Commitment
LIHTC	Proportional amortization	$	93,214	$	54,440	$	84,428	$	55,754
FHTC	Equity	36,715		27,214		19,316		9,588
NMTC	Consolidation	45,637		—		51,912		—
Renewable Energy	Equity	385		—		1,099		—
Total		$	175,951	$	81,654	$	156,755	$	65,342

(1)All commitments will be paid by Old National by December 31, 2027.

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The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments:

(dollars in thousands)	Amortization Expense (1)		Tax Expense (Benefit) Recognized (2)
Three Months Ended September 30, 2023
LIHTC	$	3,208	$	(3,582)
FHTC	330		(399)
NMTC	2,092		(2,611)
Renewable Energy	222		—
Total	$	5,852	$	(6,592)
Three Months Ended September 30, 2022
LIHTC	$	1,240	$	(1,650)
FHTC	215		(262)
NMTC	2,237		(2,788)
Renewable Energy	210		—
Total	$	3,902	$	(4,700)
Nine Months Ended September 30, 2023
LIHTC	$	6,135	$	(7,398)
FHTC	1,178		(1,423)
NMTC	6,275		(7,833)
Renewable Energy	714		—
Total	$	14,302	$	(16,654)
Nine Months Ended September 30, 2022
LIHTC	$	3,734	$	(4,950)
FHTC	635		(776)
NMTC	4,439		(5,538)
Renewable Energy	629		—
Total	$	9,437	$	(11,264)

(1)The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, and Renewable Energy tax credits is included in noninterest expense.

(2)All of the tax benefits recognized are included in our income tax expense.  The tax benefit recognized for the FHTC, NMTC, and Renewable Energy investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).

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NOTE 10 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are secured borrowings.  Old National pledges investment securities to secure these borrowings. The following table presents securities sold under agreements to repurchase and related weighted-average interest rates:

	At or for the Nine Months Ended September 30,
(dollars in thousands)	2023			2022
Outstanding at period end	$	279,061		$	438,053
Average amount outstanding during the period	351,362			450,966
Maximum amount outstanding at any month-end during the period	430,537			509,275
Weighted-average interest rate:
During the period	0.91		%	0.09		%
At period end	1.35		%	0.40		%

At December 31, 2022, securities sold under agreements to repurchase totaled $432.8 million with a weighted-average interest rate of 1.31%.

The following table presents the contractual maturity of our secured borrowings and class of collateral pledged:

	At September 30, 2023
	Remaining Contractual Maturity of the Agreements
(dollars in thousands)	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 days		Total
Repurchase Agreements:
U.S. Treasury and agency securities	$	279,061	$	—	$	—	$	—	$	279,061
Total	$	279,061	$	—	$	—	$	—	$	279,061

The fair value of securities pledged to secure repurchase agreements may decline.  Old National has pledged securities valued at 107% of the gross outstanding balance of repurchase agreements at September 30, 2023 to manage this risk.

NOTE 11 – FEDERAL HOME LOAN BANK ADVANCES

The following table summarizes Old National Bank’s FHLB advances:

(dollars in thousands)	September 30, 2023		December 31, 2022
FHLB advances (fixed rates 0.00% to 5.61%    and variable rates 5.35% to 5.36%) maturing    December 2023 to September 2042	$	4,450,528	$	3,850,677
Fair value hedge basis adjustments and unamortized    prepayment fees	(37,952)		(21,659)
Total	$	4,412,576	$	3,829,018

FHLB advances had weighted-average rates of 3.36% at September 30, 2023 and 3.15% at December 31, 2022. Certain FHLB advances are collateralized with loans and investment securities up to 190%.

At September 30, 2023, total unamortized prepayment fees related to debt modifications completed in prior years totaled $15.7 million, compared to $20.2 million at December 31, 2022.

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Contractual maturities of FHLB advances at September 30, 2023 were as follows:

(dollars in thousands)
Due in 2023	$	100,000
Due in 2024	25,243
Due in 2025	550,285
Due in 2026	100,000
Thereafter	3,675,000
Fair value hedge basis adjustments and unamortized prepayment fees	(37,952)
Total	$	4,412,576

NOTE 12 – OTHER BORROWINGS

The following table summarizes Old National’s other borrowings:

(dollars in thousands)	September 30, 2023		December 31, 2022
Old National Bancorp:
Senior unsecured notes (fixed rate 4.125%) maturing August 2024	$	175,000	$	175,000
Unamortized debt issuance costs related to senior unsecured notes	(130)		(247)
Subordinated debentures (fixed rate 5.875%) maturing September 2026	150,000		150,000
Junior subordinated debentures (rates of 6.95% to 9.21%) maturing    July 2031 to September 2037	136,643		136,643
Other basis adjustments	19,496		23,363
Old National Bank:
Finance lease liabilities	21,595		13,469
Subordinated debentures (variable rate 9.99%) maturing October 2025	12,000		12,000
Leveraged loans for NMTC (fixed rates of 1.00% to 1.43%)    maturing December 2046 to June 2060	143,745		143,187
Other (1)	205,106		89,588
Total other borrowings	$	863,455	$	743,003

(1)Includes overnight borrowings to collateralize certain derivative positions totaling $204.5 million at September 30, 2023 and $88.0 million at December 31, 2022.

Contractual maturities of other borrowings at September 30, 2023 were as follows:

(dollars in thousands)
Due in 2023	$	205,160
Due in 2024	177,653
Due in 2025	14,740
Due in 2026	151,576
Due in 2027	1,636
Thereafter	292,738
Unamortized debt issuance costs and other basis adjustments	19,952
Total	$	863,455

Junior Subordinated Debentures

Junior subordinated debentures related to trust preferred securities are classified in “other borrowings.”  Junior subordinated debentures qualify as Tier 2 capital for regulatory purposes, subject to certain limitations.

Through various mergers and acquisitions, Old National assumed junior subordinated debenture obligations related to various trusts that issued trust preferred securities.  Old National guarantees the payment of distributions on the trust preferred securities issued by the trusts.  Proceeds from the issuance of each of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by the trusts.

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Old National, at any time, may redeem the junior subordinated debentures at par and, thereby cause a redemption of the trust preferred securities in whole or in part.

The following table summarizes the terms of our outstanding junior subordinated debentures at September 30, 2023:

(dollars in thousands)					Rate at September 30, 2023
Name of Trust	Issuance Date	Issuance Amount		Rate		Maturity Date
Bridgeview Statutory Trust I	July 2001	$	15,464	3-month SOFR plus 3.58%	9.21%	July 31, 2031
Bridgeview Capital Trust II	December 2002	15,464		3-month SOFR plus 3.35%	8.92%	January 7, 2033
First Midwest Capital Trust I	November 2003	37,825		6.95% fixed	6.95%	December 1, 2033
St. Joseph Capital Trust II	March 2005	5,155		3-month SOFR plus 1.75%	7.42%	March 17, 2035
Northern States Statutory Trust I	September 2005	10,310		3-month SOFR plus 1.80%	7.47%	September 15, 2035
Anchor Capital Trust III	August 2005	5,000		3-month SOFR plus 1.55%	7.21%	September 30, 2035
Great Lakes Statutory Trust II	December 2005	6,186		3-month SOFR plus 1.40%	7.07%	December 15, 2035
Home Federal Statutory    Trust I	September 2006	15,464		3-month SOFR plus 1.65%	7.32%	September 15, 2036
Monroe Bancorp Capital    Trust I	July 2006	3,093		3-month SOFR plus 1.60%	7.17%	October 7, 2036
Tower Capital Trust 3	December 2006	9,279		3-month SOFR plus 1.69%	7.36%	March 1, 2037
Monroe Bancorp Statutory    Trust II	March 2007	5,155		3-month SOFR plus 1.60%	7.27%	June 15, 2037
Great Lakes Statutory Trust III	June 2007	8,248		3-month SOFR plus 1.70%	7.37%	September 15, 2037
Total		$	136,643

Subordinated Debentures

Old National assumed $12.0 million of subordinated fixed-to-floating notes related to the acquisition of Anchor Bancorp, Inc. (MN).  The debentures currently have a floating rate of interest equal to the three-month term SOFR rate plus 4.618%.

Old National assumed $150.0 million of subordinated fixed rate notes related to the First Midwest merger. The subordinated debentures have a 5.875% fixed rate of interest through the September 29, 2026 maturity date.

Leveraged Loans

The leveraged loans are directly related to the NMTC structure. As part of the transaction structure, Old National has the right to sell its interest in the entity that received the leveraged loans at an agreed upon price to the leveraged lender at the end of the NMTC seven-year compliance period. See Note 9 to the consolidated financial statements for additional information on the Company’s NMTC investments.

Finance Lease Liabilities

Old National has long-term finance lease liabilities for certain banking centers and equipment totaling $21.6 million at September 30, 2023.  See Note 7 to the consolidated financial statements for a maturity analysis of the Company’s finance lease liabilities.

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NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes within each classification of AOCI, net of tax:

(dollars in thousands)	Unrealized Gains and Losses on Available- for-Sale Debt Securities		Unrealized Gains and Losses on Held-to- Maturity Securities		Gains and Losses on Hedges		Defined Benefit Pension Plans		Total
Three Months Ended September 30, 2023
Balance at beginning of period	$	(701,393)	$	(103,144)	$	(4,096)	$	—	$	(808,633)
Other comprehensive income (loss) before    reclassifications	(156,660)		—		(11,546)		—		(168,206)
Amounts reclassified from AOCI to income (1)	178		4,193		3,653		—		8,024
Balance at end of period	$	(857,875)	$	(98,951)	$	(11,989)	$	—	$	(968,815)
Three Months Ended September 30, 2022
Balance at beginning of period	$	(437,075)	$	(122,199)	$	(9,875)	$	16	$	(569,133)
Other comprehensive income (loss) before    reclassifications	(217,401)		—		(27,725)		—		(245,126)
Amounts reclassified from AOCI to income (1)	131		5,121		565		(8)		5,809
Balance at end of period	$	(654,345)	$	(117,078)	$	(37,035)	$	8	$	(808,450)
Nine Months Ended September 30, 2023
Balance at beginning of period	$	(642,346)	$	(112,664)	$	(31,549)	$	137	$	(786,422)
Other comprehensive income (loss) before    reclassifications	(219,562)		1,325		34,279		—		(183,958)
Amounts reclassified from AOCI to income (1)	4,033		12,388		(14,719)		(137)		1,565
Balance at end of period	$	(857,875)	$	(98,951)	$	(11,989)	$	—	$	(968,815)
Nine Months Ended September 30, 2022
Balance at beginning of period	$	(2,950)	$	—	$	543	$	32	$	(2,375)
Other comprehensive income (loss) before    reclassifications	(651,330)		(125,229)		(37,473)		—		(814,032)
Amounts reclassified from AOCI to income (1)	(65)		8,151		(105)		(24)		7,957
Balance at end of period	$	(654,345)	$	(117,078)	$	(37,035)	$	8	$	(808,450)

(1)See table below for details about reclassifications to income.

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The following table summarizes the amounts reclassified out of each component of AOCI for the three months ended September 30, 2023 and 2022:

	Three Months Ended September 30,
(dollars in thousands)	2023		2022
Details about AOCI Components	Amount Reclassified from AOCI				Affected Line Item in the Statement of Income
Unrealized gains and losses on    available-for-sale securities	$	(241)	$	(172)	Debt securities gains (losses), net
	63		41		Income tax (expense) benefit
	$	(178)	$	(131)	Net income (loss)
Unrealized gains and losses on    held-to-maturity securities	$	(5,623)	$	(6,772)	Interest income (expense)
	1,430		1,651		Income tax (expense) benefit
	$	(4,193)	$	(5,121)	Net income (loss)
Gains and losses on hedges    Interest rate contracts	$	(4,927)	$	(749)	Interest income (expense)
	1,274		184		Income tax (expense) benefit
	$	(3,653)	$	(565)	Net income (loss)
Amortization of defined benefit    pension items
Actuarial gains (losses)	$	—	$	11	Salaries and employee benefits
	—		(3)		Income tax (expense) benefit
	$	—	$	8	Net income (loss)
Total reclassifications for the period	$	(8,024)	$	(5,809)	Net income (loss)

The following table summarizes the amounts reclassified out of each component of AOCI for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Details about AOCI Components	Amount Reclassified from AOCI				Affected Line Item in the Statement of Income
Unrealized gains and losses on    available-for-sale securities	$	(5,440)	$	85	Debt securities gains (losses), net
	1,407		(20)		Income tax (expense) benefit
	$	(4,033)	$	65	Net income (loss)
Unrealized gains and losses on    held-to-maturity securities	$	(16,574)	$	(10,774)	Interest income (expense)
	4,186		2,623		Income tax (expense) benefit
	$	(12,388)	$	(8,151)	Net income (loss)
Gains and losses on hedges    Interest rate contracts	$	19,893	$	139	Interest income (expense)
	(5,174)		(34)		Income tax (expense) benefit
	$	14,719	$	105	Net income (loss)
Amortization of defined benefit    pension items
Actuarial gains (losses)	$	182	$	32	Salaries and employee benefits
	(45)		(8)		Income tax (expense) benefit
	$	137	$	24	Net income (loss)
Total reclassifications for the period	$	(1,565)	$	(7,957)	Net income (loss)

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NOTE 14 – INCOME TAXES

Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2023			2022			2023			2022
Provision at statutory rate of 21%	$	40,358		$	37,598		$	122,352		$	59,365
Tax-exempt income:
Tax-exempt interest	(4,625)			(3,929)			(13,716)			(10,335)
Section 291/265 interest disallowance	675			85			1,593			150
Company-owned life insurance income	(743)			(684)			(2,315)			(2,340)
Tax-exempt income	(4,693)			(4,528)			(14,438)			(12,525)
State income taxes	8,163			7,050			24,856			7,808
Interim period effective rate adjustment	116			(31)			(607)			3,042
Tax credit investments - federal	(2,071)			(2,407)			(7,122)			(4,968)
Officer compensation limitation	1,040			401			3,120			1,053
Non-deductible FDIC premiums	1,949			1,178			6,096			2,549
Other, net	(558)			(374)			(1,139)			(1,187)
Income tax expense (benefit)	$	44,304		$	38,887		$	133,118		$	55,137
Effective tax rate	23.1		%	21.7		%	22.9		%	19.5		%

The provision for income taxes was recorded at September 30, 2023 and 2022 based on the current estimate of the effective annual rate.

The higher effective tax rate during the nine months ended September 30, 2023 compared to the same period in 2022 reflected an increase in pre-tax book income combined with smaller increases in tax-exempt income and tax credits. Other contributing factors were increases in non-deductible officer compensation and non-deductible FDIC premiums as well as the First Midwest merger in February 2022.

Net Deferred Tax Assets

Net deferred tax assets are included in other assets on the balance sheet. At September 30, 2023, net deferred tax assets totaled $480.7 million, compared to $435.8 million at December 31, 2022. No valuation allowance was required on the Company’s deferred tax assets at September 30, 2023 or December 31, 2022.

The Company’s retained earnings at September 30, 2023 included an appropriation for acquired thrifts’ tax bad debt allowances totaling $58.6 million for which no provision for federal or state income taxes has been made.  If in the future, this portion of retained earnings were distributed as a result of the liquidation of the Company or its subsidiaries, federal and state income taxes would be imposed at the then applicable rates.

Old National has federal net operating loss carryforwards totaling $68.4 million at September 30, 2023 and $81.5 million at December 31, 2022.  This federal net operating loss was acquired from the acquisition of Anchor BanCorp Wisconsin Inc. in 2016 and First Midwest in 2022.  If not used, the federal net operating loss carryforwards will begin expiring in 2030 and later.  Old National has recorded state net operating loss carryforwards totaling $115.6 million at September 30, 2023 and $124.4 million at December 31, 2022.  If not used, the state net operating loss carryforwards will expire from 2027 to 2036.

The federal and recorded state net operating loss carryforwards are subject to an annual limitation under Internal Revenue Code section 382.  Old National believes that all of the federal and recorded state net operating loss carryforwards will be used prior to expiration.

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NOTE 15 – DERIVATIVE FINANCIAL INSTRUMENTS

As part of our overall interest rate risk management, Old National uses derivative instruments, including interest rate swaps, collars, caps, and floors.  The notional amount does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative instruments are recognized on the balance sheet at their fair value and are not reported on a net basis.

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts.  Old National’s exposure is limited to the termination value of the contracts rather than the notional, principal, or contract amounts.  There are provisions in our agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold.  Exposures in excess of the agreed thresholds are collateralized.  In addition, we minimize credit risk through credit approvals, limits, and monitoring procedures.

Derivatives Designated as Hedges

Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as part of a hedging relationship are accounted for in the following manner:

Cash flow hedges: changes in fair value are recognized as a component in other comprehensive income (loss).

Fair value hedges: changes in fair value are recognized concurrently in earnings.

As long as a hedging instrument is designated and the results of the effectiveness testing support that the instrument qualifies for hedge accounting treatment, 100% of the periodic changes in fair value of the hedging instrument are accounted for as outlined above. This is the case whether or not economic mismatches exist in the hedging relationship. As a result, there is no periodic measurement or recognition of ineffectiveness. Rather, the full impact of hedge gains and losses is recognized in the period in which the hedged transactions impact earnings.

The change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness is presented in the same income statement line item that is used to present the earnings effect of the hedged item.

Cash Flow Hedges

Interest rate swaps of certain borrowings were designated as cash flow hedges totaling $150.0 million notional amount at both September 30, 2023 and December 31, 2022. Interest rate collars and floors related to variable-rate commercial loan pools were designated as cash flow hedges totaling $1.5 billion notional amount at September 30, 2023 and $1.9 billion notional amount at December 31, 2022. The hedges were determined to be effective during all periods presented and we expect them to remain effective during the remaining terms.

Old National has designated its interest rate collars as cash flow hedges.  The structure of these instruments is such that Old National pays the counterparty an incremental amount if the collar index exceeds the cap rate.  Conversely, Old National receives an incremental amount if the index falls below the floor rate.  No payments are required if the collar index falls between the cap and floor rates. 

Old National has designated its interest rate floor transactions as cash flow hedges.  The structure of these instruments is such that Old National receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate.

Fair Value Hedges

Interest rate swaps of certain borrowings were designated as fair value hedges totaling $700.0 million notional amount at September 30, 2023 and $300.0 million notional amount at December 31, 2022. Interest rate swaps of certain available-for-sale investment securities were designated as fair value hedges totaling $998.1 million notional amount at September 30, 2023 and $910.0 million notional amount at December 31, 2022. The hedges were determined to be effective during all periods presented and we expect them to remain effective during the remaining terms.

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The following table summarizes Old National’s derivatives designated as hedges:

	September 30, 2023						December 31, 2022
			Fair Value						Fair Value
(dollars in thousands)	Notional		Assets (1)		Liabilities (2)		Notional		Assets (1)		Liabilities (2)
Cash flow hedges
Interest rate collars and floors on loan pools	$	1,500,000	$	2,214	$	27,749	$	1,900,000	$	11,764	$	47,859
Interest rate swaps on borrowings (3)	150,000		—		—		150,000		—		—
Fair value hedges
Interest rate swaps on investment securities (3)	998,107		—		—		909,957		—		—
Interest rate swaps on borrowings (3)	700,000		—		—		300,000		—		—
Total			$	2,214	$	27,749			$	11,764	$	47,859

(1)Derivative assets are included in other assets on the balance sheet.

(2)Derivative liabilities are included in other liabilities on the balance sheet.

(3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally cleared variation margin rules.

The effect of derivative instruments in fair value hedging relationships on the consolidated statements of income were as follows:

(dollars in thousands)						Gain (Loss) Recognized in Income on Related Hedged Items
Derivatives in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative		Hedged Items in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in in Income on Related Hedged Item
Three Months Ended September 30, 2023
Interest rate contracts	Interest income/(expense)	$	(9,553)	Fixed-rate debt	Interest income/(expense)	$	9,566
Interest rate contracts	Interest income/(expense)	45,537		Fixed-rate investment securities	Interest income/(expense)	(46,055)
Total		$	35,984			$	(36,489)
Three Months Ended September 30, 2022
Interest rate contracts	Interest income/(expense)	$	(532)	Fixed-rate debt	Interest income/(expense)	$	638
Interest rate contracts	Interest income/(expense)	47,963		Fixed-rate investment securities	Interest income/(expense)	(47,975)
Total		$	47,431			$	(47,337)
Nine Months Ended September 30, 2023
Interest rate contracts	Interest income/(expense)	$	(18,500)	Fixed-rate debt	Interest income/(expense)	$	18,303
Interest rate contracts	Interest income/(expense)	7,268		Fixed-rate investment securities	Interest income/(expense)	(7,671)
Total		$	(11,232)			$	10,632
Nine Months Ended September 30, 2022
Interest rate contracts	Interest income/(expense)	$	(7,889)	Fixed-rate debt	Interest income/(expense)	$	8,193
Interest rate contracts	Interest income/(expense)	159,397		Fixed-rate investment securities	Interest income/(expense)	(159,767)
Total		$	151,508			$	(151,574)

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The effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income were as follows:

		Three Months Ended September 30,				Three Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss) Reclassified from AOCI into Income	Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Gain (Loss) Reclassified from AOCI into Income
Interest rate contracts	Interest income/(expense)	$	(15,574)	$	(36,755)	$	(5,960)	$	(749)
		Nine Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss) Reclassified from AOCI into Income	Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Gain (Loss) Reclassified from AOCI into Income
Interest rate contracts	Interest income/(expense)	$	4,302	$	(49,679)	$	17,481	$	139

Amounts reported in AOCI related to cash flow hedges will be reclassified to interest income or interest expense as interest payments are received or paid on Old National’s derivative instruments.  During the next 12 months, we estimate that $5.8 million will be reclassified to interest income and $26.3 million will be reclassified to interest expense.

Derivatives Not Designated as Hedges

Commitments to fund certain mortgage loans (interest rate lock commitments) and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives.  These derivative contracts do not qualify for hedge accounting.  At September 30, 2023, the notional amounts of the interest rate lock commitments were $42.5 million and forward commitments were $54.7 million.  At December 31, 2022, the notional amounts of the interest rate lock commitments were $21.4 million and forward commitments were $30.3 million.  It is our practice to enter into forward commitments for the future delivery of residential mortgage loans to third party investors when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from our commitment to fund the loans.

Old National also enters into derivative instruments for the benefit of its clients. The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $5.8 billion at September 30, 2023 and $5.2 billion at December 31, 2022. These derivative contracts do not qualify for hedge accounting.  These instruments include interest rate swaps, caps, and collars.  Commonly, Old National will economically hedge significant exposures related to these derivative contracts entered into for the benefit of clients by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms.

Old National enters into derivative financial instruments as part of its foreign currency risk management strategies.  These derivative instruments consist of foreign currency forward contracts to accommodate the business needs of its clients.  Old National does not designate these foreign currency forward contracts for hedge accounting treatment.

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The following table summarizes Old National’s derivatives not designated as hedges:

	September 30, 2023						December 31, 2022
			Fair Value						Fair Value
(dollars in thousands)	Notional		Assets (1)		Liabilities (2)		Notional		Assets (1)		Liabilities (2)
Interest rate lock commitments	$	42,492	$	—	$	146	$	21,401	$	93	$	—
Forward mortgage loan contracts	54,730		1,031		—		30,330		32		—
Customer interest rate swaps	5,775,638		1,208		379,864		5,220,363		5,676		326,924
Counterparty interest rate swaps (3)	5,775,634		222,907		1,213		5,220,363		151,111		5,711
Customer foreign currency contracts	13,234		218		156		8,341		253		42
Counterparty foreign currency contracts	12,970		255		141		8,297		72		168
Total			$	225,619	$	381,520			$	157,237	$	332,845

(1)Derivative assets are included in other assets on the balance sheet.

(2)Derivative liabilities are included in other liabilities on the balance sheet.

(3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally cleared variation margin rules.

The effect of derivatives not designated as hedging instruments on the consolidated statements of income were as follows:

		Three Months Ended September 30,
(dollars in thousands)		2023		2022
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative
Interest rate contracts (1)	Other income/(expense)	$	426	$	108
Mortgage contracts	Mortgage banking revenue	391		638
Foreign currency contracts	Other income/(expense)	(3)		75
Total		$	814	$	821
		Nine Months Ended September 30,
		2023		2022
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative
Interest rate contracts (1)	Other income/(expense)	$	1,125	$	1,058
Mortgage contracts	Mortgage banking revenue	760		(735)
Foreign currency contracts	Other income/(expense)	(16)		113
Total		$	1,869	$	436

(1)Includes the valuation differences between the customer and offsetting swaps.

NOTE 16 – COMMITMENTS, CONTINGENCIES, AND FINANCIAL GUARANTEES

Litigation

At September 30, 2023, there were certain legal proceedings pending against the Company and its subsidiaries in the ordinary course of business. While the outcome of any legal proceeding is inherently uncertain, based on information currently available, the Company’s management does not expect that any potential liabilities arising from pending legal matters will have a material adverse effect on the Company’s business, financial position, or results of operations.

Credit-Related Financial Instruments

Old National holds instruments, in the normal course of business with clients, that are considered financial guarantees and are recorded at fair value.  Standby letters of credit guarantees are issued in connection with agreements made by clients to counterparties.  Standby letters of credit are contingent upon failure of the client to

42

perform the terms of the underlying contract.  Credit risk associated with standby letters of credit is essentially the same as that associated with extending loans to clients and is subject to normal credit policies.  The term of these standby letters of credit is typically one year or less.  These commitments are not recorded in the consolidated financial statements.  

The following table summarizes Old National Bank’s unfunded loan commitments and standby letters of credit:

(dollars in thousands)	September 30, 2023		December 31, 2022
Unfunded loan commitments	$	9,142,538	$	8,979,334
Standby letters of credit (1)	184,027		174,070

(1)Notional amount, which represents the maximum amount of future funding requirements. The carrying value was $1.2 million at September 30, 2023 and $0.8 million at December 31, 2022.

At September 30, 2023, approximately 4% of the unfunded loan commitments had fixed rates, with the remainder having floating rates ranging from 0% to 23%.  The allowance for unfunded loan commitments totaled $33.0 million at September 30, 2023 and $32.2 million at December 31, 2022.

Old National is a party in risk participation transactions of interest rate swaps, which had total notional amounts of $522.5 million at September 30, 2023 and $398.9 million at December 31, 2022.

Visa Class B Restricted Shares

In 2008, Old National received Visa Class B restricted shares as part of Visa’s initial public offering.  These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares.  This conversion will not occur until the final settlement of certain litigation for which Visa is indemnified by the holders of Visa’s Class B shares, including Old National.  Visa funded an escrow account from its initial public offering to settle these litigation claims.  Increases in litigation claims requiring Visa to fund the escrow account due to insufficient funds will result in a reduction of the conversion ratio of each Visa Class B share to unrestricted Class A shares.  As of September 30, 2023, the conversion ratio was 1.5875.  Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation, the 65,466 Class B shares that Old National owns at September 30, 2023 are carried at a zero cost basis and are included in other assets with our equity securities that have no readily determinable fair value.

NOTE 17 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

•Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

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Old National used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment securities and equity securities: The fair values for investment securities and equity securities are determined by quoted market prices, if available (Level 1).  For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).  For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).  Discounted cash flows are calculated using swap and SOFR curves plus spreads that adjust for loss severities, volatility, credit risk, and optionality.  During times when trading is more liquid, broker quotes are used (if available) to validate the model.  Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Loans held-for-sale: The fair value of loans held-for-sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2).

Derivative financial instruments: The fair values of derivative financial instruments are based on market quotes developed using observable inputs as of the valuation date (Level 2).

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Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which we have elected the fair value option, are summarized below: 

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Equity securities	$	69,880	$	69,880	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury	548,126		548,126		—		—
U.S. government-sponsored entities and agencies	1,142,900		—		1,142,900		—
Mortgage-backed securities - Agency	3,862,705		—		3,862,705		—
States and political subdivisions	544,944		—		544,944		—
Pooled trust preferred securities	11,125		—		11,125		—
Other securities	304,961		—		304,961		—
Loans held-for-sale	122,033		—		122,033		—
Derivative assets	227,833		—		227,833		—
Financial Liabilities
Derivative liabilities	409,269		—		409,269		—

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Equity securities	$	52,507	$	52,507	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury	200,927		200,927		—		—
U.S. government-sponsored entities and agencies	1,175,080		—		1,175,080		—
Mortgage-backed securities - Agency	4,369,902		—		4,369,902		—
States and political subdivisions	663,852		—		663,852		—
Pooled trust preferred securities	10,811		—		10,811		—
Other securities	353,140		—		353,140		—
Loans held-for-sale	11,926		—		11,926		—
Derivative assets	169,001		—		169,001		—
Financial Liabilities
Derivative liabilities	380,704		—		380,704		—

Non-Recurring Basis

Assets measured at fair value at September 30, 2023 on a non-recurring basis are summarized below:

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral Dependent Loans:
Commercial loans	$	10,783	$	—	$	—	$	10,783
Commercial real estate loans	75,720		—		—		75,720
Foreclosed Assets:
Commercial	1,879		—		—		1,879

45

Commercial and commercial real estate loans that are deemed collateral dependent are valued using the discounted cash flows.  The liquidation amounts are based on the fair value of the underlying collateral using the most recently available appraisals with certain adjustments made based on the type of property, age of appraisal, current status of the property, and other related factors to estimate the current value of the collateral.  These commercial and commercial real estate loans had a principal amount of $117.5 million, with a valuation allowance of $31.0 million at September 30, 2023.  Old National recorded provision expense associated with these loans totaling $2.1 million and $21.9 million for the three and nine months ended September 30, 2023, respectively.  Old National recorded provision expense associated with commercial and commercial real estate loans that were deemed collateral dependent totaling $7.3 million and $20.1 million for the three and nine months ended September 30, 2022, respectively.

Other real estate owned and other repossessed property is measured at fair value less costs to sell on a non-recurring basis and had a net carrying amount of $1.9 million at September 30, 2023. There were $26 thousand of write-downs on other real estate owned for the three months ended September 30, 2023 and $0.1 million for nine months ended September 30, 2023. There were write-downs totaling $0.2 million and $0.6 million for the three and nine months ended September 30, 2022, respectively.

Loan servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount.  If the carrying amount of an individual tranche exceeds fair value, impairment is recorded on that tranche so that the servicing asset is carried at fair value.  Fair value is determined at a tranche level, based on market prices for comparable mortgage servicing contracts when available, or alternatively based on a valuation model that calculates the present value of estimated future net servicing income.  The valuation model utilizes a discount rate, weighted average prepayment speed, and other economic factors that market participants would use in estimating future net servicing income and that can be validated against available market data (Level 2).  There was no valuation allowance for loan servicing rights with impairments at September 30, 2023 and no impairments or recoveries recorded during the three or nine months ended September 30, 2023. Old National recorded immaterial recoveries associated with loan servicing rights during the three and nine months ended September 30, 2022.

Assets measured at fair value at December 31, 2022 on a non-recurring basis are summarized below:

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral Dependent Loans:
Commercial loans	$	22,562	$	—	$	—	$	22,562
Commercial real estate loans	48,026		—		—		48,026

At December 31, 2022, commercial and commercial real estate loans that are deemed collateral dependent had a principal amount of $92.0 million, with a valuation allowance of $21.5 million.

46

The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:

(dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Input	Range (Weighted Average) (1)
September 30, 2023
Collateral Dependent Loans
Commercial loans	$	10,783	Discounted	Discount for type of property,	10% - 40% (33%)
			cash flow	age of appraisal, and current status
Commercial real estate loans	75,720		Discounted	Discount for type of property,	1% - 38% (17%)
			cash flow	age of appraisal, and current status
Foreclosed Assets
Commercial real estate	1,879		Fair value of	Discount for type of property,	4% - 17% (6%)
			collateral	age of appraisal, and current status
December 31, 2022
Collateral Dependent Loans
Commercial loans	$	22,562	Discounted	Discount for type of property,	10% - 47% (28%)
			cash flow	age of appraisal, and current status
Commercial real estate loans	48,026		Discounted	Discount for type of property,	1% - 26% (11%)
			cash flow	age of appraisal, and current status

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

Fair Value Option

Old National may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis with changes in fair value reported in net income.  After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability, or firm commitment or when certain specified reconsideration events occur.  The fair value election may not be revoked once an election is made.

Loans Held-For-Sale

Old National has elected the fair value option for loans held-for-sale.  For these loans, interest income is recorded in the consolidated statements of income based on the contractual amount of interest income earned on the financial assets (except any that are on nonaccrual status).  None of these loans are 90 days or more past due, nor are any on nonaccrual status.  Interest income for loans held-for-sale is included in the income statement totaling $0.4 million and $0.9 million for the three and nine months ended September 30, 2023, respectively, compared to $0.4 million and $1.6 million for the three and nine months ended September 30, 2022, respectively.

Newly originated conforming fixed-rate and adjustable-rate first mortgage loans are intended for sale and are hedged with derivative instruments.  Old National has elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification.  The fair value option was not elected for loans held for investment.

The difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was as follows: 

(dollars in thousands)	Aggregate Fair Value		Difference		Contractual Principal
September 30, 2023
Loans held-for-sale	$	122,033	$	72	$	121,961
December 31, 2022
Loans held-for-sale	$	11,926	$	221	$	11,705

Accrued interest at period end is included in the fair value of the instruments.

47

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:

(dollars in thousands)	Other Gains and (Losses)		Interest Income		Interest (Expense)		Total Changes in Fair Values Included in Current Period Earnings
Three Months Ended September 30, 2023
Loans held-for-sale	$	(327)	$	12	$	—	$	(315)
Three Months Ended September 30, 2022
Loans held-for-sale	$	(710)	$	1	$	—	$	(709)
Nine Months Ended September 30, 2023
Loans held-for-sale	$	(151)	$	2	$	—	$	(149)
Nine Months Ended September 30, 2022
Loans held-for-sale	$	(1,775)	$	7	$	—	$	(1,768)

Financial Instruments Not Carried at Fair Value

The carrying amounts and estimated exit price fair values of financial instruments not carried at fair value were as follows: 

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Cash, due from banks, money market,    and other interest-earning investments	$	1,663,430	$	1,663,430	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies	824,223		—		617,010		—
Mortgage-backed securities - Agency	1,043,585		—		847,652		—
State and political subdivisions	1,160,106		—		928,959		—
Loans, net:
Commercial	9,207,028		—		—		9,078,129
Commercial real estate	13,770,202		—		—		13,302,502
Residential real estate	6,675,508		—		—		5,630,855
Consumer credit	2,621,114		—		—		2,526,277
Accrued interest receivable	209,503		1,093		45,597		162,813
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	10,091,352	$	10,091,352	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits	21,585,620		21,585,620		—		—
Time deposits	5,575,704		—		5,527,361		—
Federal funds purchased and interbank borrowings	918		918		—		—
Securities sold under agreements to repurchase	279,061		279,061		—		—
FHLB advances	4,412,576		—		4,167,911		—
Other borrowings	863,455		—		843,629		—
Accrued interest payable	46,934		—		46,934		—
Standby letters of credit	1,224		—		—		1,224
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,582

48

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Cash, due from banks, money market,    and other interest-earning investments	$	728,412	$	728,412	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies	819,168		—		656,358		—
Mortgage-backed securities - Agency	1,106,817		—		982,963		—
State and political subdivisions	1,163,162		—		1,004,361		—
Loans, net:
Commercial	9,386,862		—		—		9,066,583
Commercial real estate	12,317,825		—		—		11,867,851
Residential real estate	6,438,525		—		—		5,372,491
Consumer credit	2,676,758		—		—		2,557,115
Accrued interest receivable	190,521		758		52,081		137,682
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	11,930,798	$	11,930,798	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits	20,056,252		20,056,252		—		—
Time deposits	3,013,780		—		2,976,389		—
Federal funds purchased and interbank borrowings	581,489		581,489		—		—
Securities sold under agreements to repurchase	432,804		432,804		—		—
FHLB advances	3,829,018		—		3,739,780		—
Other borrowings	743,003		—		703,156		—
Accrued interest payable	19,547		—		19,547		—
Standby letters of credit	755		—		—		755
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,666

The methods utilized to measure the fair value of financial instruments at September 30, 2023 and December 31, 2022 represent an approximation of exit price, however, an actual exit price may differ.

49

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is an analysis of our results of operations for the three and nine months ended September 30, 2023 and 2022, and financial condition as of September 30, 2023, compared to December 31, 2022.  This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes, as well as our 2022 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward‐looking statements within the meaning of the Act. These statements include, but are not limited to, descriptions of Old National’s financial condition, results of operations, asset and credit quality trends, profitability and business plans or opportunities. Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “should,” and “will,” and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: competition; government legislation, regulations and policies; the ability of Old National to execute its business plan; unanticipated changes in our liquidity position, including but not limited to changes in our access to sources of liquidity and capital to address our liquidity needs; changes in economic conditions and economic and business uncertainty which could materially impact credit quality trends and the ability to generate loans and gather deposits; inflation and governmental responses to inflation, including increasing interest rates; market, economic, operational, liquidity, credit, and interest rate risks associated with our business; our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses; uncertainty about the discontinued use of LIBOR and the transition to an alternative rate; the potential impact of current and future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses and the success of revenue-generating and cost reduction initiatives; failure or circumvention of our internal controls; operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities; disruptive technologies in payment systems and other services traditionally provided by banks; failure or disruption of our information systems; computer hacking and other cybersecurity threats; the effects of climate change on Old National and its customers, borrowers, or service providers; political and economic uncertainty and instability; the impacts of pandemics, epidemics, and other infectious disease outbreaks; other matters discussed in this report; and other factors identified in filings with the SEC. These forward-looking statements are made only as of the date of this report and are not guarantees of future results, performance, or outcomes.

Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect.  Therefore, undue reliance should not be placed upon these estimates and statements. We cannot assure that any of these statements, estimates, or beliefs will be realized and actual results or outcomes may differ from those contemplated in these forward-looking statements.  We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise after the date of this report.  You are advised to consult further disclosures we may make on related subjects in our filings with the SEC.

Investors should consider these risks, uncertainties, and other factors in addition to the factors under the heading “Risk Factors” included in our other filings with the SEC.

50

FINANCIAL HIGHLIGHTS

The following table sets forth certain financial highlights of Old National for the previous five quarters:

	Three Months Ended
(dollars and shares in thousands, except per share data)	September 30,			June 30,			March 31,			December 31,			September 30,
	2023			2023			2023			2022			2022
Income Statement:
Net interest income	$	375,086		$	382,171		$	381,488		$	391,090		$	376,589
Taxable equivalent adjustment (1) (4)	5,837			5,825			5,666			5,378			4,950
Net interest income - taxable equivalent basis (4)	380,923			387,996			387,154			396,468			381,539
Provision for credit losses (2)	19,068			14,787			13,437			11,408			15,490
Noninterest income	80,938			81,629			70,681			165,037			80,385
Noninterest expense (2)	244,776			246,584			250,711			282,675			262,444
Net income available to common shareholders	$	143,842		$	151,003		$	142,566		$	196,701		$	136,119
Per Common Share Data:
Weighted average diluted common shares	291,717			291,266			292,756			293,131			292,483
Net income (diluted)	$	0.49		$	0.52		$	0.49		$	0.67		$	0.47
Cash dividends	0.14			0.14			0.14			0.14			0.14
Common dividend payout ratio (3)	29		%	27		%	29		%	21		%	30		%
Book value	$	17.07		$	17.25		$	17.24		$	16.68		$	16.05
Stock price	14.54			13.94			14.42			17.98			16.47
Tangible common book value (4)	9.87			10.03			9.98			9.42			8.75
Performance Ratios:
Return on average assets	1.22		%	1.29		%	1.25		%	1.74		%	1.22		%
Return on average common equity	11.39			12.01			11.58			16.77			11.13
Return on tangible common equity (4)	20.54			21.20			20.20			29.25			22.07
Return on average tangible common equity (4)	20.18			21.35			21.03			31.53			20.49
Net interest margin (4)	3.49			3.60			3.69			3.85			3.71
Efficiency ratio (4)	51.66			51.22			52.81			49.12			55.26
Efficiency ratio (prior presentation) (5)	N/A			N/A			N/A			N/A			56.17
Net charge-offs (recoveries) to average loans	0.24			0.13			0.21			0.05			0.10
Allowance for credit losses on loans to ending loans	0.93			0.93			0.94			0.98			0.99
Allowance for credit losses (6) to ending loans	1.03			1.04			1.05			1.08			1.08
Non-performing loans to ending loans	0.80			0.91			0.74			0.81			0.81
Balance Sheet:
Total loans	$	32,577,834		$	32,432,473		$	31,822,374		$	31,123,641		$	30,528,933
Total assets	49,059,448			48,496,755			47,842,644			46,763,372			46,215,526
Total deposits	37,252,676			36,231,315			34,917,792			35,000,830			36,053,663
Total borrowed funds	5,556,010			6,034,008			6,740,454			5,586,314			4,264,750
Total shareholders’ equity	5,239,537			5,292,095			5,277,426			5,128,595			4,943,383
Capital Ratios:
Risk-based capital ratios:
Tier 1 common equity	10.41		%	10.14		%	9.98		%	10.03		%	9.88		%
Tier 1	11.06			10.79			10.64			10.71			10.58
Total	12.32			12.14			11.96			12.02			11.84
Leverage ratio (to average assets)	8.70			8.59			8.53			8.52			8.26
Total equity to assets (averages)	10.88			10.96			11.00			10.70			11.18
Tangible common equity to tangible assets (4)	6.15			6.33			6.37			6.18			5.82
Nonfinancial Data:
Full-time equivalent employees	3,981			4,021			4,023			3,967			4,008
Banking centers	257			256			256			263			263

(1)Calculated using the federal statutory tax rate in effect of 21% for all periods.

(2)Provision for unfunded loan commitments is included in the provision for credit losses. The reclassification of the provision for unfunded loan commitments out of other expense as a component of noninterest expense was made to amounts prior to December 31, 2022 to conform to the current period presentation.

(3)Cash dividends per common share divided by net income per common share (basic).

(4)Represents a non-GAAP financial measure.  Refer to the “Non-GAAP Financial Measures” section for reconciliations to GAAP financial measures.

(5)Presented as calculated prior to December 31, 2022, which included the provision for unfunded loan commitments in noninterest expense. Management believes that removing the provision for unfunded loan commitments from this metric enhances comparability for peer comparison purposes.

(6)Includes the allowance for credit losses on loans and unfunded loan commitments.

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The following table sets forth certain financial highlights of Old National for the year-to-date periods:

	Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2023			2022
Income Statement:
Net interest income	$	1,138,745		$	936,846
Taxable equivalent adjustment (1) (4)	17,328			13,036
Net interest income - taxable equivalent basis (4)	1,156,073			949,882
Provision for credit losses (2)	47,292			133,391
Noninterest income	233,248			234,742
Noninterest expense (2)	742,071			755,508
Net income available to common shareholders	$	437,411		$	217,468
Per Common Share Data:
Weighted average diluted common shares	291,809			271,123
Net income (diluted)	$	1.50		$	0.80
Cash dividends	0.42			0.42
Common dividend payout ratio (3)	28		%	53		%
Book value	$	17.07		$	16.05
Stock price	14.54			16.47
Tangible common book value (4)	9.87			8.75
Performance Ratios:
Return on average assets	1.25		%	0.72		%
Return on average common equity	11.66			6.26
Return on tangible common equity (4)	20.82			12.05
Return on average tangible common equity (4)	20.85			11.50
Net interest margin (4)	3.59			3.34
Efficiency ratio (4)	51.89			62.17
Efficiency ratio (prior presentation) (5)	N/A			63.46
Net charge-offs (recoveries) to average loans	0.19			0.06
Allowance for credit losses on loans to ending loans	0.93			0.99
Allowance for credit losses (6) to ending loans	1.03			1.08
Non-performing loans to ending loans	0.80			0.81
Balance Sheet:
Total loans	$	32,577,834		$	30,528,933
Total assets	49,059,448			46,215,526
Total deposits	37,252,676			36,053,663
Total borrowed funds	5,556,010			4,264,750
Total shareholders’ equity	5,239,537			4,943,383
Capital Ratios:
Risk-based capital ratios:
Tier 1 common equity	10.41		%	9.88		%
Tier 1	11.06			10.58
Total	12.32			11.84
Leverage ratio (to average assets)	8.70			8.26
Total equity to assets (averages)	10.95			11.43
Tangible common equity to tangible assets (4)	6.15			5.82
Nonfinancial Data:
Full-time equivalent employees	3,981			4,008
Banking centers	257			263

(1)Calculated using the federal statutory tax rate in effect of 21% for all periods.

(2)Provision for unfunded loan commitments is included in the provision for credit losses. The reclassification of the provision for unfunded loan commitments out of other expense as a component of noninterest expense was made to amounts prior to December 31, 2022 to conform to the current period presentation.

(3)Cash dividends per common share divided by net income per common share (basic).

(4)Represents a non-GAAP financial measure.  Refer to the “Non-GAAP Financial Measures” section for reconciliations to GAAP financial measures.

(5)Presented as calculated prior to December 31, 2022, which included the provision for unfunded loan commitments in noninterest expense. Management believes that removing the provision for unfunded loan commitments from this metric enhances comparability for peer comparison purposes.

(6)Includes the allowance for credit losses on loans and unfunded loan commitments.

52

NON-GAAP FINANCIAL MEASURES

The Company’s accounting and reporting policies conform to GAAP and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company’s operating performance. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the following table.

The taxable equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes.

In management’s view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company’s use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution’s capital strength since they eliminate intangible assets from shareholders’ equity and retain the effect of AOCI in shareholders’ equity.

Although intended to enhance investors’ understanding of the Company’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the “Non-GAAP Reconciliations” section for details on the calculation of these measures to the extent presented herein.

53

The following table presents GAAP to non-GAAP reconciliations for the previous five quarters:

	Three Months Ended
(dollars and shares in thousands, except per share data)	September 30,			June 30,			March 31,			December 31,			September 30,
	2023			2023			2023			2022			2022
Tangible common book value:
Shareholders’ common equity	$	4,995,818		$	5,048,376		$	5,033,707		$	4,884,876		$	4,699,664
Deduct: Goodwill and intangible assets	2,106,835			2,112,875			2,118,935			2,125,121			2,135,792
Tangible shareholders’ common equity (1)	$	2,888,983		$	2,935,501		$	2,914,772		$	2,759,755		$	2,563,872
Period end common shares	292,586			292,597			291,922			292,903			292,880
Tangible common book value (1)	9.87			10.03			9.98			9.42			8.75
Return on tangible common equity:
Net income applicable to common shares	$	143,842		$	151,003		$	142,566		$	196,701		$	136,119
Add:  Intangible amortization (net of tax) (2)	4,530			4,545			4,639			5,090			5,317
Tangible net income (1)	$	148,372		$	155,548		$	147,205		$	201,791		$	141,436
Tangible shareholders’ common equity (1)    (see above)	$	2,888,983		$	2,935,501		$	2,914,772		$	2,759,755		$	2,563,872
Return on tangible common equity (1)	20.54		%	21.20		%	20.20		%	29.25		%	22.07		%
Return on average tangible common equity:
Tangible net income (1) (see above)	$	148,372		$	155,548		$	147,205		$	201,791		$	141,436
Average shareholders’ common equity	$	5,050,353		$	5,030,083		$	4,922,469		$	4,692,863		$	4,890,434
Deduct: Average goodwill and intangible assets	2,109,944			2,115,894			2,122,157			2,132,480			2,129,858
Average tangible shareholders’ common equity (1)	$	2,940,409		$	2,914,189		$	2,800,312		$	2,560,383		$	2,760,576
Return on average tangible common equity (1)	20.18		%	21.35		%	21.03		%	31.53		%	20.49		%
Net interest margin:
Net interest income	$	375,086		$	382,171		$	381,488		$	391,090		$	376,589
Taxable equivalent adjustment	5,837			5,825			5,666			5,378			4,950
Net interest income - taxable equivalent basis (1)	$	380,923		$	387,996		$	387,154		$	396,468		$	381,539
Average earning assets	$	43,617,456		$	43,097,198		$	41,941,913		$	41,206,695		$	41,180,026
Net interest margin (1)	3.49		%	3.60		%	3.69		%	3.85		%	3.71		%
Efficiency ratio:
Noninterest expense	$	244,776		$	246,584		$	250,711		$	282,675		$	262,444
Deduct:  Intangible amortization expense	6,040			6,060			6,186			6,787			7,089
Adjusted noninterest expense (1)	$	238,736		$	240,524		$	244,525		$	275,888		$	255,355
Net interest income - taxable equivalent basis (1)    (see above)	$	380,923		$	387,996		$	387,154		$	396,468		$	381,539
Noninterest income	80,938			81,629			70,681			165,037			80,385
Deduct:  Debt securities gains (losses), net	(241)			17			(5,216)			(173)			(172)
Adjusted total revenue (1)	$	462,102		$	469,608		$	463,051		$	561,678		$	462,096
Efficiency ratio (1)	51.66		%	51.22		%	52.81		%	49.12		%	55.26		%
Tangible common equity to tangible assets:
Tangible shareholders’ equity (1) (see above)	$	2,888,983		$	2,935,501		$	2,914,772		$	2,759,755		$	2,563,872
Assets	$	49,059,448		$	48,496,755		$	47,842,644		$	46,763,372		$	46,215,526
Deduct: Goodwill and intangible assets	2,106,835			2,112,875			2,118,935			2,125,121			2,135,792
Tangible assets (1)	$	46,952,613		$	46,383,880		$	45,723,709		$	44,638,251		$	44,079,734
Tangible common equity to tangible assets (1)	6.15		%	6.33		%	6.37		%	6.18		%	5.82		%

(1)Represents a non-GAAP financial measure.

(2)Calculated using management’s estimate of the annual fully taxable equivalent rates (federal and state).

54

The following table presents GAAP to non-GAAP reconciliations for the year-to-date periods:

	Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2023			2022
Tangible common book value:
Shareholders’ common equity	$	4,995,818		$	4,699,664
Deduct: Goodwill and intangible assets	2,106,835			2,135,792
Tangible shareholders’ common equity (1)	$	2,888,983		$	2,563,872
Period end common shares	292,586			292,880
Tangible common book value (1)	9.87			8.75
Return on tangible common equity:
Net income applicable to common shares	$	437,411		$	217,468
Add:  Intangible amortization (net of tax) (2)	13,714			14,302
Tangible net income (1)	$	451,125		$	231,770
Tangible shareholders’ common equity (1) (see above)	$	2,888,983		$	2,563,872
Return on tangible common equity (1)	20.82		%	12.05		%
Return on average tangible common equity:
Tangible net income (1) (see above)	$	451,125		$	231,770
Average shareholders’ common equity	$	5,001,437		$	4,628,831
Deduct: Average goodwill and intangible assets	2,115,953			1,941,270
Average tangible shareholders’ common equity (1)	$	2,885,484		$	2,687,561
Return on average tangible common equity (1)	20.85		%	11.50		%
Net interest margin:
Net interest income	$	1,138,745		$	936,846
Taxable equivalent adjustment	17,328			13,036
Net interest income - taxable equivalent basis (1)	$	1,156,073		$	949,882
Average earning assets	$	42,891,660		$	37,924,490
Net interest margin (1)	3.59		%	3.34		%
Efficiency ratio:
Noninterest expense	$	742,071		$	755,508
Deduct:  Intangible amortization expense	18,286			19,070
Adjusted noninterest expense (1)	$	723,785		$	736,438
Net interest income - taxable equivalent basis (1) (see above)	$	1,156,073		$	949,882
Noninterest income	233,248			234,742
Deduct:  Debt securities gains (losses), net	(5,440)			85
Adjusted total revenue (1)	$	1,394,761		$	1,184,539
Efficiency ratio (1)	51.89		%	62.17		%
Tangible common equity to tangible assets:
Tangible shareholders’ equity (1) (see above)	$	2,888,983		$	2,563,872
Assets	$	49,059,448		$	46,215,526
Deduct: Goodwill and intangible assets	2,106,835			2,135,792
Tangible assets (1)	$	46,952,613		$	44,079,734
Tangible common equity to tangible assets (1)	6.15		%	5.82		%

(1)Represents a non-GAAP financial measure.

(2)Calculated using management’s estimate of the annual fully taxable equivalent rates (federal and state).

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EXECUTIVE SUMMARY

Old National is the sixth largest commercial bank headquartered in the Midwest by asset size with consolidated assets of approximately $49 billion at September 30, 2023.  The Company’s corporate headquarters and principal executive office is located in Evansville, Indiana with commercial and consumer banking operations headquartered in Chicago, Illinois. Old National, through Old National Bank, provides a wide range of banking services throughout the Midwest region, including commercial and consumer loan and depository services, as well as other traditional banking services.  Old National also provides services to supplement its traditional banking business including fiduciary and wealth management services, investment and brokerage services, investment consulting, and other financial services.

Net income applicable to common shareholders for the third quarter of 2023 was $143.8 million, or $0.49 per diluted common share, compared to $151.0 million, or $0.52 per diluted common share, for the second quarter of 2023.

Results for the third quarter of 2023 were impacted by $6.3 million of merger-related charges. The second quarter of 2023 was impacted by pre-tax charges of $3.4 million related to the tragic April 10 event at our downtown Louisville location (“Louisville expenses”), merger-related charges of $2.4 million, and $0.2 million for property optimization.

We achieved strong results during the third quarter of 2023, including growth in total deposits and loans, modest compression of net interest income reflective of the rate environment, stable credit quality, and disciplined expense management.

Deposits:  Period-end total deposits increased $1.0 billion, or 3%, to $37.3 billion, reflecting continued efforts to compete for new client relationships as well as seasonal patterns in public funds compared to June 30, 2023.

Loans:  Our loan balances, excluding loans held-for-sale, increased $145.4 million to $32.6 billion at September 30, 2023 compared to June 30, 2023.  This was primarily driven by disciplined commercial real estate loan growth, partially offset by $389 million of commercial loan sales during the quarter.

Net Interest Income: Net interest income decreased $7.1 million to $375.1 million compared to the second quarter of 2023 driven by higher funding costs, partly offset by loan growth and higher rates on interest-earning assets.

Provision for Credit Losses:  Provision for credit losses increased $4.3 million to $19.1 million compared to the second quarter of 2023 reflecting net charge-offs and loan growth, as well as economic factors.

Noninterest Income:  Noninterest income decreased $0.7 million to $80.9 million compared to the second quarter of 2023 reflecting lower company-owned life insurance and other income offset by increases in all fee income categories.

Noninterest Expense:  Noninterest expense decreased $1.8 million compared to the second quarter of 2023. Noninterest expense included $6.3 million of merger-related expenses in the third quarter of 2023 compared to $6.0 million of Louisville expenses, merger-related charges, and charges for property optimization in the second quarter of 2023. Excluding these expenses, noninterest expense decreased $2.1 million compared to the second quarter of 2023 primarily due to higher salary and employee benefits in the second quarter of 2023 resulting from performance-driven incentive accruals.

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RESULTS OF OPERATIONS

The following table sets forth certain income statement information of Old National:

(dollars in thousands, except    per share data)	Three Months Ended September 30,						% Change		Nine Months Ended September 30,						% Change
	2023			2022					2023			2022
Income Statement Summary:
Net interest income	$	375,086		$	376,589		(0.4)	%	$	1,138,745		$	936,846		21.6	%
Provision for credit losses	19,068			15,490			23.1		47,292			133,391			(64.5)
Noninterest income	80,938			80,385			0.7		233,248			234,742			(0.6)
Noninterest expense	244,776			262,444			(6.7)		742,071			755,508			(1.8)
Net income applicable to common    shareholders	143,842			136,119			5.7		437,411			217,468			101.1
Net income per common share -    diluted	0.49			0.47			4.3		1.50			0.80			87.5
Other Data:
Return on average common equity	11.39		%	11.13		%			11.66		%	6.26		%
Return on tangible common equity (1)	20.54			22.07					20.82			12.05
Return on average tangible common    equity (1)	20.18			20.49					20.85			11.50
Efficiency ratio (1)	51.66			55.26					51.89			62.17
Efficiency ratio (prior presentation) (2)	N/A			56.17					N/A			63.46
Tier 1 leverage ratio	8.70			8.26					8.70			8.26
Net charge-offs (recoveries) to    average loans	0.24			0.10					0.19			0.06

(1)Represents a non-GAAP financial measure.  Refer to “Non-GAAP Financial Measures” section for reconciliations to GAAP financial measures.

(2)Presented as calculated prior to December 31, 2022, which included the provision for unfunded loan commitments in noninterest expense. Management believes that removing the provision for unfunded loan commitments from this metric enhances comparability for peer comparison purposes.

Net Interest Income

Net interest income is the most significant component of our earnings, comprising 83% of revenues for the nine months ended September 30, 2023.  Net interest income and net interest margin are influenced by many factors, primarily the volume and mix of earning assets, funding sources, and interest rate fluctuations.  Other factors include the level of accretion income on purchased loans, prepayment risk on mortgage and investment-related assets, and the composition and maturity of interest-earning assets and interest-bearing liabilities.

Interest rates increased during the third quarter of 2023. The Federal Reserve’s Federal Funds Rate is currently in a target range of 5.25% to 5.50%, with the Effective Federal Funds Rate increasing 25 basis points from June 30, 2023 to 5.33% at September 30, 2023. Management actively takes balance sheet restructuring, derivative, and deposit pricing actions to help mitigate interest rate risk. See the section of this Item 7 titled “Market Risk” for additional information regarding this risk.

Loans typically generate more interest income than investment securities with similar maturities.  Funding from client deposits generally costs less than wholesale funding sources.  Factors such as general economic activity, Federal Reserve monetary policy, and price volatility of competing alternative investments can also exert significant influence on our ability to optimize our mix of assets and funding, net interest income, and net interest margin.

Net interest income is the excess of interest received from interest-earning assets over interest paid on interest-bearing liabilities.  For analytical purposes, net interest income is presented in the table that follows, adjusted to a taxable equivalent basis to reflect what our tax-exempt assets would need to yield in order to achieve the same after-tax yield as a taxable asset.  We used the current federal statutory tax rate in effect of 21% for all periods.  This analysis portrays the income tax benefits related to tax-exempt assets and helps to facilitate a comparison between taxable and tax-exempt assets.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully taxable equivalent basis and that it may enhance comparability for peer comparison purposes for both management and investors.

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The following tables present the average balance sheet for each major asset and liability category, its related interest income and yield, or its expense and rate.

(Tax equivalent basis, dollars in thousands)	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
Earning Assets	Average Balance		Income (1)/ Expense		Yield/ Rate		Average Balance		Income (1)/ Expense		Yield/ Rate
Money market and other interest-earning    investments	$	980,813	$	13,194	5.34	%	$	514,362	$	935	0.72	%
Investment securities:
Treasury and government sponsored agencies	2,376,864		23,037		3.88	%	2,326,070		13,212		2.27	%
Mortgage-backed securities	5,079,091		33,237		2.62	%	5,891,283		36,157		2.45	%
States and political subdivisions	1,737,037		14,220		3.27	%	1,829,322		14,631		3.20	%
Other securities	793,196		10,127		5.11	%	718,735		6,781		3.77	%
Total investment securities	9,986,188		80,621		3.23	%	10,765,410		70,781		2.63	%
Loans: (2)
Commercial	9,612,102		163,869		6.82	%	9,045,009		113,491		5.02	%
Commercial real estate	13,711,156		219,575		6.41	%	11,929,892		136,780		4.59	%
Residential real estate loans	6,712,269		62,775		3.74	%	6,189,503		56,432		3.65	%
Consumer	2,614,928		42,322		6.42	%	2,735,850		33,049		4.79	%
Total loans	32,650,455		488,541		5.98	%	29,900,254		339,752		4.54	%
Total earning assets	43,617,456		$	582,356	5.34	%	41,180,026		$	411,468	3.99	%
Deduct: Allowance for credit losses on loans	(300,071)						(290,215)
Non-Earning Assets
Cash and due from banks	382,755						503,841
Other assets	4,960,383						4,522,171
Total assets	$	48,660,523					$	45,915,823
Interest-Bearing Liabilities
Checking and NOW	$	7,515,439	$	25,531	1.35	%	$	8,681,392	$	5,751	0.26	%
Savings	5,414,775		4,268		0.31	%	6,733,465		547		0.03	%
Money market	7,979,999		65,549		3.26	%	5,344,567		2,072		0.15	%
Time deposits	5,412,920		52,080		3.82	%	2,508,152		2,450		0.39	%
Total interest-bearing deposits	26,323,133		147,428		2.22	%	23,267,576		10,820		0.18	%
Federal funds purchased and interbank    borrowings	62,921		910		5.74	%	122,311		720		2.34	%
Securities sold under agreements to repurchase	302,305		710		0.93	%	436,225		106		0.10	%
FHLB advances	4,537,250		40,382		3.53	%	3,025,844		13,027		1.71	%
Other borrowings	841,307		12,003		5.66	%	676,874		5,256		3.08	%
Total borrowed funds	5,743,783		54,005		3.73	%	4,261,254		19,109		1.78	%
Total interest-bearing liabilities	$	32,066,916	$	201,433	2.49	%	$	27,528,830	$	29,929	0.43	%
Noninterest-Bearing Liabilities and    Shareholders’ Equity
Demand deposits	$	10,338,267					$	12,575,011
Other liabilities	961,268						677,829
Shareholders’ equity	5,294,072						5,134,153
Total liabilities and shareholders’ equity	$	48,660,523					$	45,915,823
Net interest income - taxable equivalent basis			$	380,923	3.49	%			$	381,539	3.71	%
Taxable equivalent adjustment			(5,837)						(4,950)
Net interest income (GAAP)			$	375,086	3.44	%			$	376,589	3.66	%

(1)Interest income is reflected on a fully taxable equivalent basis.

(2)Includes loans held-for-sale.

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(Tax equivalent basis, dollars in thousands)	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
Earning Assets	Average Balance		Income (1)/ Expense		Yield/ Rate		Average Balance		Income (1)/ Expense		Yield/ Rate
Money market and other interest-earning    investments	$	736,225	$	25,258	4.59	%	$	976,579	$	3,073	0.42	%
Investment securities:
Treasury and government sponsored agencies	2,266,177		58,923		3.47	%	2,336,897		33,249		1.90	%
Mortgage-backed securities	5,268,509		102,618		2.60	%	5,593,341		94,067		2.24	%
States and political subdivisions	1,771,155		43,306		3.26	%	1,801,053		42,839		3.17	%
Other securities	785,474		28,726		4.88	%	682,937		16,392		3.20	%
Total investment securities	10,091,315		233,573		3.09	%	10,414,228		186,547		2.39	%
Loans: (2)
Commercial	9,644,541		475,210		6.57	%	7,888,730		264,517		4.47	%
Commercial real estate	13,180,509		598,337		6.05	%	10,753,988		327,733		4.06	%
Residential real estate loans	6,626,551		181,592		3.65	%	5,369,844		142,105		3.53	%
Consumer	2,612,519		120,428		6.16	%	2,521,121		85,442		4.53	%
Total loans	32,064,120		1,375,567		5.72	%	26,533,683		819,797		4.12	%
Total earning assets	42,891,660		$	1,634,398	5.08	%	37,924,490		$	1,009,417	3.55	%
Deduct: Allowance for credit losses on loans	(301,909)						(247,558)
Non-Earning Assets
Cash and due from banks	412,998						350,848
Other assets	4,917,592						4,249,986
Total assets	$	47,920,341					$	42,277,766
Interest-Bearing Liabilities
Checking and NOW	$	7,793,561	$	69,248	1.19	%	$	7,977,524	$	8,133	0.14	%
Savings	5,791,780		9,745		0.22	%	6,295,628		1,809		0.04	%
Money market	6,577,317		120,917		2.46	%	4,819,252		3,791		0.11	%
Time deposits	4,540,042		111,085		3.27	%	2,253,711		5,468		0.32	%
Total interest-bearing deposits	24,702,700		310,995		1.68	%	21,346,115		19,201		0.12	%
Federal funds purchased and interbank    borrowings	306,480		11,404		4.97	%	41,993		722		2.30	%
Securities sold under agreements to repurchase	351,362		2,389		0.91	%	450,966		287		0.09	%
FHLB advances	4,699,074		123,466		3.51	%	2,891,347		25,915		1.20	%
Other borrowings	806,575		30,071		4.98	%	574,589		13,410		3.12	%
Total borrowed funds	6,163,491		167,330		3.63	%	3,958,895		40,334		1.36	%
Total interest-bearing liabilities	$	30,866,191	$	478,325	2.07	%	$	25,305,010	$	59,535	0.31	%
Noninterest-Bearing Liabilities and    Shareholders’ Equity
Demand deposits	$	10,864,375					$	11,540,293
Other liabilities	944,619						601,619
Shareholders’ equity	5,245,156						4,830,844
Total liabilities and shareholders’ equity	$	47,920,341					$	42,277,766
Net interest income - taxable equivalent basis			$	1,156,073	3.59	%			$	949,882	3.34	%
Taxable equivalent adjustment			(17,328)						(13,036)
Net interest income (GAAP)			$	1,138,745	3.54	%			$	936,846	3.29	%

(1)Interest income is reflected on a fully taxable equivalent basis.

(2)Includes loans held-for-sale.

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The following table presents the dollar amount of changes in taxable equivalent net interest income attributable to changes in the average balances of assets and liabilities and the yields earned or rates paid.

	From Three Months Ended September 30, 2022 to Three Months Ended September 30, 2023						From Nine Months Ended September 30, 2022 to Nine Months Ended September 30, 2023
	Total Change (1)		Attributed to				Total Change (1)		Attributed to
(dollars in thousands)			Volume		Rate				Volume		Rate
Interest Income
Money market and other interest-earning    investments	$	12,259	$	3,583	$	8,676	$	22,185	$	(4,544)	$	26,729
Investment securities (2)	9,840		(5,708)		15,548		47,026		(6,630)		53,656
Loans (3)	148,789		36,149		112,640		555,770		203,985		351,785
Total interest income	170,888		34,024		136,864		624,981		192,811		432,170
Interest Expense
Checking and NOW deposits	19,780		(2,318)		22,098		61,115		(951)		62,066
Savings deposits	3,721		(554)		4,275		7,936		(474)		8,410
Money market deposits	63,477		11,456		52,021		117,126		16,819		100,307
Time deposits	49,630		15,478		34,152		105,617		30,621		74,996
Federal funds purchased and interbank    borrowings	190		(599)		789		10,682		7,200		3,482
Securities sold under agreements to    repurchase	604		(170)		774		2,102		(375)		2,477
FHLB advances	27,355		10,010		17,345		97,551		31,804		65,747
Other borrowings	6,747		1,824		4,923		16,661		7,028		9,633
Total interest expense	171,504		35,127		136,377		418,790		91,672		327,118
Net interest income	$	(616)	$	(1,103)	$	487	$	206,191	$	101,139	$	105,052

(1)The variance not solely due to rate or volume is allocated equally between the rate and volume variances.

(2)Interest income on investment securities includes taxable equivalent adjustments of $2.9 million and $8.7 million during the three and nine months ended September 30, 2023, respectively, using the federal statutory rate in effect of 21%.

(3)Interest income on loans includes taxable equivalent adjustments of $3.0 million and $8.6 million during the three and nine months ended September 30, 2023, respectively, using the federal statutory rate in effect of 21%.

The decrease in net interest income for the three months ended September 30, 2023 when compared to the same period in 2022 was primarily due to higher balances and costs of average interest-bearing liabilities and lower accretion income, partially offset by higher rates on loans and loan growth. The increase in net interest income for the nine months ended September 30, 2023 when compared to the same period in 2022 was primarily due to higher rates on loans and loan growth, partially offset by higher balances and costs of average interest-bearing liabilities and lower accretion income. Accretion income associated with acquired loans and borrowings totaled $7.5 million and $22.1 million in the three and nine months ended September 30, 2023, respectively, compared to $25.4 million and $76.2 million in the three and nine months ended September 30, 2022, respectively.

The decrease in the net interest margin on a fully taxable equivalent basis for the three months ended September 30, 2023 compared to the same period in 2022 was primarily due to higher costs of interest-bearing liabilities, partially offset by higher yields on interest earning assets. The increase in the net interest margin on a fully taxable equivalent basis for the nine months ended September 30, 2023 when compared to the same period in 2022 was primarily due to higher yields on interest earning assets, partially offset by higher costs of interest-bearing liabilities. The yield on interest earning assets increased 135 basis points and the cost of interest-bearing liabilities increased 206 basis points in the three months ended September 30, 2023 compared to the same quarter a year ago.  The yield on interest earning assets increased 153 basis points and the cost of interest-bearing liabilities increased 176 basis points in the nine months ended September 30, 2023 when compared to the nine months ended September 30, 2022.  Accretion income represented 7 basis points of the net interest margin in both of the three and nine months ended September 30, 2023, compared to 25 basis points and 27 basis points in the three and nine months ended September 30, 2022, respectively.

Average earning assets were $43.6 billion and $41.2 billion for the three months ended September 30, 2023 and 2022, respectively, an increase of $2.4 billion, or 6%, primarily due to strong commercial, commercial real estate, and residential real estate loan growth. Average earning assets were $42.9 billion and $37.9 billion for the nine

60

months ended September 30, 2023 and 2022, respectively, an increase of $5.0 billion, or 13%, primarily due to the merger with First Midwest and strong loan growth.

Average loans, including loans held-for-sale, increased $2.8 billion and $5.5 billion for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022. The increase for the three months ended September 30, 2023 was primarily due to strong commercial, commercial real estate, and residential real estate loan growth. The increase for the nine months ended September 30, 2023 was primarily due to the merger with First Midwest and strong loan growth.

Average investments decreased $779.2 million and $322.9 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022. These decreases reflect the utilization of securities cash flows to fund loan growth.

Average noninterest-bearing deposits decreased $2.2 billion while average interest-bearing deposits increased $3.1 billion for the three months ended September 30, 2023 when compared to the same period in 2022 reflecting total deposit growth and a mix shift as a result of the current rate environment. Average noninterest-bearing deposits decreased $675.9 million while interest-bearing deposits increased $3.4 billion for the nine months ended September 30, 2023 when compared to the nine months ended September 30, 2022 primarily due to the First Midwest merger and a mix shift as a result of the current rate environment.

Average borrowed funds increased $1.5 billion and $2.2 billion for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022.

Provision for Credit Losses

The following table details the components of the provision for credit losses:

	Three Months Ended September 30,				%		Nine Months Ended September 30,				%
(dollars in thousands)	2023		2022		Change		2023		2022		Change
Provision for credit losses on loans	$	23,115	$	11,288	104.8	%	$	46,520	$	117,951	(60.6)	%
Provision (release) for credit losses on    unfunded loan commitments	(4,047)		4,203		(196.3)		772		15,290		(95.0)
Provision for credit losses on held-to-    maturity securities	—		(1)		(100.0)		—		150		(100.0)
Total provision for credit losses	$	19,068	$	15,490	23.1	%	$	47,292	$	133,391	(64.5)	%
Net (charge-offs) recoveries on non-PCD    loans	$	(20,143)	$	(1,405)	N/M	%	$	(28,870)	$	(1,386)	N/M	%
Net (charge-offs) recoveries on PCD    loans	455		(6,190)		(107.4)		(17,339)		(10,741)		61.4
Total net (charge-offs) recoveries on    loans	$	(19,688)	$	(7,595)	159.2	%	$	(46,209)	$	(12,127)	281.0	%

The provision for credit losses on loans in the nine months ended September 30, 2022 included $96.3 million to establish an allowance for credit losses on non-PCD loans acquired in the First Midwest merger. The provision for credit losses on unfunded loan commitments in the nine months ended September 30, 2022 included $11.0 million for unfunded loan commitments acquired in the First Midwest merger. Net charge-offs on non-PCD loans for the three and nine months ended September 30, 2023 included a $12.2 million charge-off related to a single commercial credit that is not representative of broader credit concerns. Continued loan growth in future periods, a decline in our current level of recoveries, or an increase in charge-offs could result in an increase in provision expense. Additionally, provision expense may be volatile due to changes in CECL model assumptions of credit quality, macroeconomic factors and conditions, and loan composition, which drive the allowance for credit losses balance.

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Noninterest Income

We generate revenues in the form of noninterest income through client fees, sales commissions, and gains and losses from our core banking franchise and other related businesses, such as wealth management, investment consulting, and investment products.  The following table details the components in noninterest income:

	Three Months Ended September 30,				%		Nine Months Ended September 30,				%
(dollars in thousands)	2023		2022		Change		2023		2022		Change
Wealth and investment services fees	$	26,687	$	25,359	5.2	%	$	80,128	$	75,183	6.6	%
Service charges on deposit accounts	18,524		20,042		(7.6)		53,278		54,392		(2.0)
Debit card and ATM fees	10,818		10,608		2.0		31,453		29,429		6.9
Mortgage banking revenue	5,063		5,360		(5.5)		12,628		19,127		(34.0)
Capital markets income	5,891		8,906		(33.9)		19,003		20,609		(7.8)
Company-owned life insurance	3,740		3,361		11.3		11,624		11,456		1.5
Debt securities gains (losses), net	(241)		(172)		40.1		(5,440)		85		N/M
Other income	10,456		6,921		51.1		30,574		24,461		25.0
Total noninterest income	$	80,938	$	80,385	0.7	%	$	233,248	$	234,742	(0.6)	%

Noninterest income increased $0.6 million for the three months ended September 30, 2023 compared to the same period in 2022 primarily due to higher other income and wealth and investment services fees, substantially offset by lower capital markets income and service charges on deposit accounts. Noninterest income decreased $1.5 million for the nine months ended September 30, 2023 compared to the same period in 2022 primarily due to lower mortgage banking revenue, capital markets income, and $5.4 million of net losses on sales of debt securities in the nine months ended September 30, 2023, partially offset by the full-period 2023 impact of the First Midwest merger which occurred in February of 2022.

Wealth and investment services fees increased $1.3 million and $4.9 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily due to higher wealth management fees as a result of continued sales to new and existing customers as well as favorable market conditions. In addition, wealth and investment services fees increased for the nine months ended September 30, 2023 compared to the same period in 2022 due to the full-period 2023 impact of the First Midwest merger which occurred in February of 2022.

Service charges on deposit accounts for the three and nine months ended September 30, 2023 were impacted by several enhancements to overdraft protection programs implemented in late 2022 to provide clients with more flexibility. The changes included the elimination of the non-sufficient fund (“NSF”) fee when an item is returned, among other modifications that benefit consumers. The impact of these enhancements for the nine months ended September 30, 2023 compared to the same period in 2022 was substantially offset by increased service charges on deposit accounts due to the full-period 2023 impact of the First Midwest merger which occurred in February of 2022.

Mortgage banking revenue decreased $0.3 million and $6.5 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily due to the higher rate environment and lower gain on sale margins.

Capital markets income decreased $3.0 million and $1.6 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily due to lower levels of commercial client interest rate swap fees and tax credit income, partially offset by higher foreign currency exchange fees. The decrease for the nine months ended September 30, 2023 compared to the same period in 2022 was partially offset by the full-period 2023 impact of the First Midwest merger which occurred in February of 2022.

Other income increased $3.5 million and $6.1 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily due to higher commercial loan fees and net gains on sales of other assets in the three months ended September 30, 2023.

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Noninterest Expense

The following table details the components in noninterest expense:

	Three Months Ended September 30,				%		Nine Months Ended September 30,				%
(dollars in thousands)	2023		2022		Change		2023		2022		Change
Salaries and employee benefits	$	131,541	$	147,203	(10.6)	%	$	404,715	$	433,167	(6.6)	%
Occupancy	25,795		26,418		(2.4)		80,162		73,933		8.4
Equipment	8,284		7,328		13.0		23,394		20,046		16.7
Marketing	9,448		10,361		(8.8)		28,698		23,756		20.8
Technology	20,592		20,269		1.6		59,850		64,914		(7.8)
Communication	4,075		5,392		(24.4)		12,768		14,687		(13.1)
Professional fees	5,956		6,559		(9.2)		19,085		32,686		(41.6)
FDIC assessment	9,000		6,249		44.0		29,028		13,523		114.7
Amortization of intangibles	6,040		7,089		(14.8)		18,286		19,070		(4.1)
Amortization of tax credit investments	2,644		2,662		(0.7)		8,167		5,703		43.2
Property optimization	—		—		N/A		1,559		—		N/A
Other expense	21,401		22,914		(6.6)		56,359		54,023		4.3
Total noninterest expense	$	244,776	$	262,444	(6.7)	%	$	742,071	$	755,508	(1.8)	%

Noninterest expense decreased $17.7 million for the three months ended September 30, 2023 compared to the same period in 2022. Noninterest expense included $6.3 million of merger-related expenses for the three months ended September 30, 2023, compared to $22.7 million for the three months ended September 30, 2022. Excluding these expenses, noninterest expense for the three months ended September 30, 2023 was stable compared to the same period in 2022 as fully achieved merger-related benefits were substantially offset by higher FDIC assessment expense.

Noninterest expense decreased $13.4 million for the nine months ended September 30, 2023 compared to the same period in 2022. Noninterest expense included merger-related expenses totaled $23.2 million for the nine months ended September 30, 2023, compared to $100.6 million for the nine months ended September 30, 2022. In addition, noninterest expense for the nine months ended September 30, 2023 included $3.4 million of Louisville expenses and $1.6 million for property optimization. Excluding these expenses, noninterest expense for the nine months ended September 30, 2023 increased $59.1 million, reflective of the additional operating costs associated with the full-period 2023 impact of the First Midwest merger which occurred in February of 2022, marketing campaigns, and higher FDIC assessment expense.

FDIC assessment expense increased $2.8 million and $15.5 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022 primarily due to higher assessment rates and deposit balances.

Amortization of tax credit investments increased $2.5 million for the nine months ended September 30, 2023 when compared to the same period in 2022. The recognition of tax credit amortization expense is contingent upon the successful completion of the rehabilitation of a historic building or completion of a solar project within the reporting period. Many factors including weather, labor availability, building regulations, inspections, and other unexpected construction delays related to a rehabilitation project can cause a project to exceed its estimated completion date.  See Note 9 to the consolidated financial statements for additional information on our tax credit investments.

FDIC Special Assessment Proposed Rule

On May 11, 2023, the Federal Deposit Insurance Corporation (“FDIC”) released a proposed rule that would impose special assessments to recover the losses to the deposit insurance fund (“DIF”) resulting from the FDIC’s use, in March 2023, of the systemic risk exception to the least-cost resolution test under the Federal Deposit Insurance Act in connection with the receiverships of Silicon Valley Bank and Signature Bank. The FDIC stated that it currently estimates those assessed losses to total $15.8 billion and that the amount of the special assessments would be adjusted as the loss estimate changes. Under the proposed rule, the assessment base would be an insured depository institution’s (“IDI”) estimated uninsured deposits, as reported in the IDI’s December 31, 2022 Call Report, excluding the first $5 billion in estimated uninsured deposits. The special assessments would be collected at an annual rate of approximately 12.5 basis points per year (3.13 basis points per quarter) over eight quarters in 2024

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and 2025, with the first assessment period beginning January 1, 2024 (with the first assessment payment due by June 28, 2024). Under the proposed rule, the estimated loss pursuant to the systemic risk determination would be periodically adjusted, and the FDIC would retain the ability to cease collection early, extend the special assessment collection period and impose a final shortfall special assessment on a one-time basis. In its December 31, 2022 Call Report, Old National Bank reported estimated uninsured deposits of approximately $12.0 billion. Old National expects the special assessments would be tax deductible. Although the proposal could be changed and the timing of accounting recognition is still under consideration, if the assessments, as proposed, were recorded as an expense in a single quarter, the estimated $17 million expense would significantly affect noninterest expense and results of operations for that quarter.

Provision for Income Taxes

We record a provision for income taxes currently payable and for income taxes payable or benefits to be received in the future, which arise due to timing differences in the recognition of certain items for financial statement and income tax purposes.  The major difference between the effective tax rate applied to our financial statement income and the federal statutory tax rate is caused by a tax benefit from our tax credit investments and interest on tax-exempt securities and loans.  The effective tax rate was 23.1% for the three months ended September 30, 2023, compared to 21.7% for the same period in 2022.  The effective tax rate was 22.9% for the nine months ended September 30, 2023, compared to 19.5% for the same period in 2022 reflecting an increase in pre-tax book income combined with smaller increases in tax-exempt income and tax credits. Other contributing factors were increases in non-deductible officer compensation and non-deductible FDIC premiums as well as the First Midwest merger in February 2022. See Note 14 to the consolidated financial statements for additional information..  In accordance with ASC 740-270, Accounting for Interim Reporting, the provision for income taxes was recorded at September 30, 2023 based on the current estimate of the effective annual rate.

FINANCIAL CONDITION

Overview

At September 30, 2023, our assets were $49.1 billion, a $2.3 billion increase compared to assets of $46.8 billion at December 31, 2022.  The increase was driven by disciplined loan growth and higher cash balances funded through higher deposits.

Earning Assets

Our earning assets are comprised of investment securities, portfolio loans, loans held-for-sale, money market investments, interest-earning accounts with the Federal Reserve, and equity securities.  Earning assets were $43.9 billion at September 30, 2023, a $2.2 billion increase compared to earning assets of $41.6 billion at December 31, 2022 driven primarily by loan growth.

Investment Securities

We classify the majority of our investment securities as available-for-sale to give management the flexibility to sell the securities prior to maturity if needed, based on fluctuating interest rates or changes in our funding requirements. During 2022, we transferred $3.0 billion of securities available-for-sale to held-to-maturity due to rising interest rates and related effects on the value of our investment securities.

The investment securities portfolio, including equity securities, was $9.9 billion at September 30, 2023 compared to $10.2 billion at December 31, 2022.  Investment securities represented 23% of earning assets at September 30, 2023, compared to 25% at December 31, 2022.  At September 30, 2023, 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.

The investment securities available-for-sale portfolio had net unrealized losses of $1.1 billion at September 30, 2023, compared to net unrealized losses of $844.4 million at December 31, 2022.  The investment securities held-to-maturity portfolio had net unrealized losses of $634.3 million at September 30, 2023, compared to net unrealized losses of $445.5 million at December 31, 2022. Net unrealized losses increased from December 31, 2022 to September 30, 2023 primarily due to higher market interest rates.

The investment securities available-for-sale portfolio including securities hedges had an effective duration of 4.33 at September 30, 2023, compared to 4.57 at December 31, 2022.  The total investment securities portfolio had an

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effective duration of 5.48 at September 30, 2023, compared to 6.45 at December 31, 2022. Effective duration represents the percentage change in the fair value of the portfolio in response to a change in interest rates and is used to evaluate the portfolio’s price volatility at a single point in time.  Generally, there is more uncertainty in interest rates over a longer average maturity, resulting in a higher duration percentage.  The annualized average yields on investment securities, on a taxable equivalent basis, were 3.23% and 3.09% for the three and nine months ended September 30, 2023, respectively, compared to 2.63% and 2.39% for the three and nine months ended September 30, 2022, respectively.

Loan Portfolio

The following table presents the composition of the loan portfolio:

(dollars in thousands)	September 30, 2023		December 31, 2022		$ Change		% Change
Commercial	$	9,333,448	$	9,508,904	$	(175,456)	(2)	%
Commercial real estate	13,916,221		12,457,070		1,459,151		12
Residential real estate	6,696,288		6,460,441		235,847		4
Consumer	2,631,877		2,697,226		(65,349)		(2)
Total loans	$	32,577,834	$	31,123,641	$	1,454,193	5	%

Commercial and Commercial Real Estate Loans

Commercial and commercial real estate loans are the largest classifications within earning assets, representing 53% of earning assets at both September 30, 2023 and December 31, 2022.  The increase in commercial and commercial real estate loans at September 30, 2023 compared to December 31, 2022 was driven by disciplined loan production that was well balanced across our market footprint and product lines, partially offset by commercial loan sales.

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The following table provides detail on commercial loans by industry classification (as defined by the North American Industry Classification System) and by loan size.

	September 30, 2023									December 31, 2022
(dollars in thousands)	Outstanding			Exposure(1)			Nonaccrual			Outstanding			Exposure(1)			Nonaccrual
By Industry:
Manufacturing	$	1,626,629		$	2,699,161		$	6,154		$	1,757,907		$	2,803,883		$	2,464
Health care and social assistance	1,338,875			1,719,741			7,529			1,588,392			2,043,105			11,806
Wholesale trade	802,398			1,577,859			4,262			857,400			1,552,985			2,895
Real estate rental and leasing	655,993			1,008,673			1,307			642,511			962,549			1,135
Construction	624,767			1,429,685			1,828			556,913			1,307,582			1,517
Finance and insurance	583,107			953,601			6			484,532			858,391			17
Transportation and warehousing	475,731			702,232			2,372			422,643			633,267			3,496
Professional, scientific, and   technical services	422,730			770,941			4,304			507,940			832,407			4,735
Accommodation and food services	363,025			488,254			425			399,915			512,025			596
Retail trade	362,840			660,614			5,948			332,367			538,135			7,386
Administrative and support and   waste management and   remediation services	310,439			481,089			169			315,785			446,655			13,860
Educational services	246,121			425,426			7			210,850			378,955			3,750
Agriculture, forestry, fishing,   and hunting	223,203			364,732			417			261,355			382,376			996
Other services	221,141			394,719			12,429			194,998			356,743			2,656
Public administration	219,090			294,745			—			231,453			325,834			846
Other	857,359			1,141,447			1,618			743,943			1,122,409			739
Total	$	9,333,448		$	15,112,919		$	48,775		$	9,508,904		$	15,057,301		$	58,894
By Loan Size:
Less than $200,000	3		%	3		%	4		%	3		%	3		%	3		%
$200,000 to $1,000,000	11			11			22			11			11			20
$1,000,000 to $5,000,000	25			26			43			25			26			36
$5,000,000 to $10,000,000	15			15			7			15			15			24
$10,000,000 to $25,000,000	31			28			24			31			27			17
Greater than $25,000,000	15			17			—			15			18			—
Total	100		%	100		%	100		%	100		%	100		%	100		%

(1)    Includes unfunded loan commitments.

The following table provides detail on commercial real estate loans classified by property type.

	September 30, 2023						December 31, 2022
(dollars in thousands)	Outstanding		Exposure(1)		Nonaccrual		Outstanding		Exposure(1)		Nonaccrual
By Property Type:
Multifamily	$	4,584,203	$	6,542,155	$	7,519	$	4,188,137	$	5,920,414	$	13,749
Warehouse / Industrial	2,593,868		3,304,937		5,381		1,976,804		2,533,892		9,090
Retail	1,903,321		1,978,067		30,804		1,808,041		1,895,345		18,155
Office	1,900,752		2,104,761		36,971		1,813,007		1,979,272		13,728
Single family	446,134		471,469		3,984		515,390		615,216		7,022
Other (2)	2,487,943		2,934,260		60,638		2,155,691		2,667,780		61,977
Total	$	13,916,221	$	17,335,649	$	145,297	$	12,457,070	$	15,611,919	$	123,721

(1)    Includes unfunded loan commitments.

(2)    Other includes agriculture real estate, hotels, self-storage, senior housing, land development, religion, and mixed-use properties.

Residential Real Estate Loans

At September 30, 2023, residential real estate loans held in our loan portfolio were $6.7 billion, an increase of $235.8 million compared to December 31, 2022.  Future increases in interest rates could result in a decline in the level of refinancings and new originations of residential real estate loans.

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Consumer Loans

Consumer loans, including automobile loans, personal, and home equity loans and lines of credit, decreased $65.3 million to $2.6 billion at September 30, 2023 compared to December 31, 2022 reflecting lower direct loans.

Other Assets

Other assets at September 30, 2023 increased $143.9 million from December 31, 2022 primarily due to higher net deferred tax assets related to the market value adjustments of certain investment securities and higher derivative assets.

Funding

The following table summarizes Old National’s total funding, comprised of deposits and wholesale borrowings:

(dollars in thousands)	September 30, 2023		December 31, 2022		$ Change		% Change
Deposits:
Noninterest-bearing demand	$	10,091,352	$	11,930,798	$	(1,839,446)	(15)	%
Interest-bearing:
Checking and NOW	7,495,417		8,340,955		(845,538)		(10)	%
Savings	5,296,985		6,326,158		(1,029,173)		(16)	%
Money market	8,793,218		5,389,139		3,404,079		63	%
Time deposits	5,575,704		3,013,780		2,561,924		85	%
Total deposits	37,252,676		35,000,830		2,251,846		6	%
Wholesale borrowings:
Federal funds purchased and interbank borrowings	918		581,489		(580,571)		(100)	%
Securities sold under agreements to repurchase	279,061		432,804		(153,743)		(36)	%
Federal Home Loan Bank advances	4,412,576		3,829,018		583,558		15	%
Other borrowings	863,455		743,003		120,452		16	%
Total wholesale borrowings	5,556,010		5,586,314		(30,304)		(1)	%
Total funding	$	42,808,686	$	40,587,144	$	2,221,542	5	%

We use wholesale funding to augment deposit funding and to help maintain our desired interest rate risk position.  Wholesale funding as a percentage of total funding was 13% at September 30, 2023 compared to 14% at December 31, 2022.

Capital 

Shareholders’ equity totaled $5.2 billion at September 30, 2023, compared to $5.1 billion at December 31, 2022.  This increase was driven by retained earnings along with changes in unrealized gains (losses) on derivatives. These increases were partially offset by dividends, changes in unrealized gains (losses) on available-for-sale investment securities, and the repurchase of 1.8 million shares of Common Stock in the nine months ended September 30, 2023 (all of which were repurchased in the first quarter of 2023) under a stock repurchase plan that was approved by the Company’s Board of Directors, which reduced equity by $29.5 million.

Capital Adequacy

Old National and the banking industry are subject to various regulatory capital requirements administered by the federal banking agencies. At September 30, 2023, Old National and its bank subsidiary exceeded the regulatory minimums and Old National Bank met the regulatory definition of “well-capitalized” based on the most recent regulatory definition.

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Old National’s consolidated capital position remains strong as evidenced by the following key industry ratios. 

	Regulatory Guidelines Minimum		Prompt Corrective Action "Well Capitalized" Guidelines		September 30, 2023		December 31, 2022
Tier 1 capital to total average assets (leverage    ratio)	4.00	%	N/A	%	8.70	%	8.52	%
Common equity Tier 1 capital to risk-weighted    total assets	7.00		N/A		10.41		10.03
Tier 1 capital to risk-weighted total assets	8.50		6.00		11.06		10.71
Total capital to risk-weighted total assets	10.50		10.00		12.32		12.02
Shareholders’ equity to assets	N/A		N/A		10.68		10.97

Old National Bank, Old National’s bank subsidiary, maintained a strong capital position as evidenced by the following key industry ratios.

	Regulatory Guidelines Minimum		Prompt Corrective Action "Well Capitalized" Guidelines		September 30, 2023		December 31, 2022
Tier 1 capital to total average assets (leverage    ratio)	4.00	%	5.00	%	8.84	%	8.47	%
Common equity Tier 1 capital to risk-weighted    total assets	7.00		6.50		11.26		10.66
Tier 1 capital to risk-weighted total assets	8.50		8.00		11.26		10.66
Total capital to risk-weighted total assets	10.50		10.00		12.00		11.35

During 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC issued final rules to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The final rules provide banking organizations the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). Old National adopted the capital transition relief over the permissible five-year period.

Management views stress testing as an integral part of the Company’s risk management and strategic planning activities. Old National performs stress testing periodically throughout the year. The primary objective of the stress test is to ensure that Old National has a robust, forward-looking stress testing process and maintains sufficient capital to continue operations throughout times of economic and financial stress. Management also uses the stress testing framework to evaluate decisions relating to pricing, loan concentrations, capital deployment, and mergers and acquisitions to ensure that strategic decisions align with Old National’s risk appetite statement. Old National’s stress testing process incorporates key risks that include strategic, market, liquidity, credit, operational, regulatory, compliance, legal, and reputational risks. Old National’s stress testing policy outlines steps that will be taken if stress test results do not meet internal thresholds under severely adverse economic scenarios.

RISK MANAGEMENT

Overview

Old National has adopted a Risk Appetite Statement to enable our Board of Directors, Executive Leadership Team, and Senior Management to better assess, understand, monitor, and mitigate Old National’s risks.  The Risk Appetite Statement addresses the following major risks:  strategic, market, liquidity, credit, operational, talent management, compliance and regulatory, legal, and reputational.  Our Chief Risk Officer provides quarterly reports to the Board’s Enterprise Risk Committee on various risk topics.  The following discussion addresses certain of these major risks including credit, market, and liquidity. Discussion of operational, compliance and regulatory, legal, strategic, talent management, and reputational risks is provided in the section entitled “Risk Factors” in the Company’s 2022 Annual Report on Form 10-K.

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Credit Risk

Credit risk represents the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms.  Our primary credit risks result from our investment and lending activities.

Asset Quality

We lend to commercial and commercial real estate clients in many diverse industries including, among others, real estate rental and leasing, manufacturing, healthcare, wholesale trade, construction, and agriculture.  Old National manages concentrations of credit exposure by industry, product, geography, client relationship, and loan size.  At September 30, 2023, our average commercial loan size was approximately $630,000 and our average commercial real estate loan size was approximately $1,400,000. In addition, while loans to lessors of residential and non-residential real estate exceed 10% of total loans, no individual sub-segment category within those broader categories reaches the 10% threshold.  At September 30, 2023, we had minimal exposure to foreign borrowers and no sovereign debt.  Our policy is to concentrate our lending activity in the geographic market areas we serve, primarily in the Midwest region.

The following table presents a summary of under-performing, criticized, and classified assets:

(dollars in thousands)	September 30, 2023			December 31, 2022
Total nonaccrual loans	$	261,346		$	238,178
TDRs still accruing (1)	N/A			15,313
Loans 90 days or more past due and still accruing	1,192			2,650
Foreclosed assets	9,761			10,845
Total under-performing assets	$	272,299		$	266,986
Classified loans (includes nonaccrual, TDRs still accruing,    past due 90 days, and other problem loans) (1)	$	825,965		$	745,485
Other classified assets (2)	48,998			24,735
Criticized loans	775,526			636,069
Total criticized and classified assets	$	1,650,489		$	1,406,289
Asset Quality Ratios:
Nonaccrual loans/total loans (3)	0.80		%	0.77		%
Non-performing loans/total loans (3) (4)	0.80			0.81
Under-performing assets/total loans (3)	0.84			0.86
Under-performing assets/total assets	0.56			0.57
Allowance for credit losses on loans/under-performing assets	111.64			113.74
Allowance for credit losses on loans/nonaccrual loans	116.31			127.50

(1)As a result of the adoption of ASU 2022-02 on January 1, 2023, the TDR classification is no longer applicable.

(2)Includes investment securities that fell below investment grade rating.

(3)Loans exclude loans held-for-sale.

(4)Non-performing loans include nonaccrual loans and TDRs still accruing for periods prior to January 1, 2023.

Under-performing assets increased to $272.3 million at September 30, 2023, compared to $267.0 million at December 31, 2022.  Under-performing assets as a percentage of total loans at September 30, 2023 were 0.84%, a 2 basis point decrease from 0.86% at December 31, 2022.

Nonaccrual loans increased $23.2 million from December 31, 2022 to September 30, 2023 reflecting PCD loan migration in the commercial real estate portfolio. As a percentage of nonaccrual loans, the allowance for credit losses on loans was 116.31% at September 30, 2023, compared to 127.50% at December 31, 2022.

Total criticized and classified assets were $1.7 billion at September 30, 2023, an increase of $244.2 million from December 31, 2022 primarily due to higher criticized commercial loans. Other classified assets include investment securities that fell below investment grade rating totaling $49.0 million at September 30, 2023, compared to $24.7 million at December 31, 2022.

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Allowance for Credit Losses on Loans and Unfunded Commitments

Net charge-offs on loans totaled $19.7 million during the three months ended September 30, 2023, compared to $7.6 million for the same period in 2022. Annualized, net charge-offs to average loans were 0.24% for the three months ended September 30, 2023, compared to 0.10% for the same period in 2022. The three months ended September 30, 2023 included net recoveries on PCD loans totaling $0.5 million, or (0.01)% on an annualized basis of average loans, compared to net charge-offs on PCD loans totaling $6.2 million, or 0.08% on an annualized basis of average loans for the three months ended September 30, 2022. Net charge-offs on loans totaled $46.2 million during the nine months ended September 30, 2023, compared to $12.1 million for the same period in 2022. Annualized, net charge-offs to average loans were 0.19% for the nine months ended September 30, 2023, compared to 0.06% for the same period in 2022. The nine months ended September 30, 2023 included net charge-offs on PCD loans totaling $17.3 million, or 0.07% on an annualized basis of average loans, compared to net charge-offs on PCD loans totaling $10.7 million, or 0.05% on an annualized basis of average loans for the nine months ended September 30, 2022. In addition, the three and nine months ended September 30, 2023 included a $12.2 million charge-off related to a single commercial credit that is not representative of broader credit concerns. Management will continue its efforts to reduce the level of non-performing loans and may consider the possibility of sales of troubled and non-performing loans, which could result in additional charge-offs to the allowance for credit losses on loans.

Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses on loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in underwriting new loans and in our process for estimating expected credit losses. Expected credit loss inherent in non-cancelable off-balance-sheet credit exposures is accounted for as a separate liability included in other liabilities on the balance sheet. The allowance for credit losses on loans held for investment and unfunded loan commitments is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Accrued interest receivable is excluded from the estimate of credit losses.

The allowance for credit loss estimation process involves procedures to consider the unique characteristics of our loan portfolio segments. These segments are further disaggregated into loan classes based on the level at which credit risk of the loan is monitored. When computing the level of expected credit losses, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status, and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods.

The allowance level is influenced by loan volumes, loan AQR migration or delinquency status, changes in historical loss experience, and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses on loans has two basic components: first, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and second, a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics.

The allowance for credit losses on loans was $304.0 million at September 30, 2023, compared to $303.7 million at December 31, 2022. Continued loan growth in future periods, a decline in our current level of recoveries, or an increase in charge-offs could result in an increase in provision expense. Additionally, provision expense may be volatile due to changes in CECL model assumptions of credit quality, macroeconomic factors and conditions, and loan composition, which drive the allowance for credit losses balance.

We maintain an allowance for credit losses on unfunded loan commitments to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses on loans, modified to take into account the probability of a drawdown on the commitment.  The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet within accrued expenses and other liabilities, while the corresponding provision for unfunded loan commitments is included in the provision for credit losses. The allowance for credit losses on unfunded loan commitments totaled $33.0 million at September 30, 2023, compared to $32.2 million at December 31, 2022.

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See the section entitled “Risk Factors” in the Company’s 2022 Annual Report on Form 10-K for further discussion of our credit risk.

Market Risk

Market risk is the risk that the estimated fair value of our assets, liabilities, and derivative financial instruments will decline as a result of changes in interest rates or financial market volatility, or that our net income will be significantly reduced by interest rate changes.

The objective of our interest rate management process is to maximize net interest income while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.

Potential cash flows, sales, or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily from our normal business activities of gathering deposits and extending loans. Many factors affect our exposure to changes in interest rates, such as general economic and financial conditions, client preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. Our earnings can also be affected by the monetary and fiscal policies of the U.S. Government and its agencies, particularly the Federal Reserve.

In managing interest rate risk, we establish guidelines for asset and liability management, including measurement of short and long-term sensitivities to changes in interest rates, which are reviewed with the Enterprise Risk Committee of our Board of Directors. Based on the results of our analysis, we may use different techniques to manage changing trends in interest rates including:

•adjusting balance sheet mix or altering interest rate characteristics of assets and liabilities;

•changing product pricing strategies;

•modifying characteristics of the investment securities portfolio; or

•using derivative financial instruments, to a limited degree.

A key element in our ongoing process is to measure and monitor interest rate risk using a model to quantify the likely impact of changing interest rates on Old National’s results of operations. The model quantifies the effects of various possible interest rate scenarios on projected net interest income. The model measures the impact on net interest income relative to a base case scenario. The base case scenario assumes that the balance sheet and interest rates are held at current levels. The model shows our projected net interest income sensitivity based on interest rate changes only and does not consider other forecast assumptions.

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The following table illustrates our projected net interest income sensitivity over a two-year cumulative horizon based on the asset/liability model at September 30, 2023 and 2022:

	Immediate Rate Decrease											Immediate Rate Increase
(dollars in thousands)	-300 Basis Points			-200 Basis Points			-100 Basis Points			Base		+100 Basis Points			+200 Basis Points			+300 Basis Points
September 30, 2023
Projected interest income:
Money market, other interest    earning investments, and    investment securities	$	722,474		$	777,196		$	834,683		$	890,384	$	958,522		$	1,026,439		$	1,094,063
Loans	2,966,315			3,323,529			3,684,648			4,040,544		4,393,546			4,747,308			5,100,845
Total interest income	3,688,789			4,100,725			4,519,331			4,930,928		5,352,068			5,773,747			6,194,908
Projected interest expense:
Deposits	528,719			785,519			1,047,596			1,279,764		1,547,400			1,826,990			2,100,598
Borrowings	366,090			432,424			521,008			598,589		676,220			753,909			831,590
Total interest expense	894,809			1,217,943			1,568,604			1,878,353		2,223,620			2,580,899			2,932,188
Net interest income	$	2,793,980		$	2,882,782		$	2,950,727		$	3,052,575	$	3,128,448		$	3,192,848		$	3,262,720
Change from base	$	(258,595)		$	(169,793)		$	(101,848)				$	75,873		$	140,273		$	210,145
% change from base	(8.47)		%	(5.56)		%	(3.34)		%			2.49		%	4.60		%	6.88		%
							Immediate Rate Decrease					Immediate Rate Increase
							-50 Basis Points			Base		+100 Basis Points			+200 Basis Points			+300 Basis Points
September 30, 2022
Projected interest income:
Money market, other interest    earning investments, and    investment securities							$	660,169		$	680,882	$	721,850		$	762,793		$	803,703
Loans							2,715,952			2,885,275		3,225,849			3,560,475			3,894,295
Total interest income							3,376,121			3,566,157		3,947,699			4,323,268			4,697,998
Projected interest expense:
Deposits							106,667			166,603		372,461			578,311			784,154
Borrowings							263,032			286,909		337,834			388,779			439,751
Total interest expense							369,699			453,512		710,295			967,090			1,223,905
Net interest income							$	3,006,422		$	3,112,645	$	3,237,404		$	3,356,178		$	3,474,093
Change from base							$	(106,223)				$	124,759		$	243,533		$	361,448
% change from base							(3.41)		%			4.01		%	7.82		%	11.61		%

Our projected net interest income increased year over year due to loan growth and rising interest rates.

A key element in the measurement and modeling of interest rate risk is the re-pricing assumptions of our transaction deposit accounts, which have no contractual maturity dates. Because the models are driven by expected behavior in various interest rate scenarios and many factors besides market interest rates affect our net interest income, we recognize that model outputs are not guarantees of actual results. For this reason, we model many different combinations of interest rates and balance sheet assumptions to understand our overall sensitivity to market interest rate changes, including shocks, ramps, yield curve flattening, yield curve steepening, as well as forecasts of likely interest rate scenarios tested.

We use cash flow and fair value hedges, primarily interest rate swaps, collars, and floors, to mitigate interest rate risk. Derivatives designated as hedging instruments were in a net liability position with a fair value loss of $25.5 million and $36.1 million at September 30, 2023 and December 31, 2022, respectively.  See Note 15 to the consolidated financial statements for further discussion of derivative financial instruments.

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Liquidity Risk

Liquidity risk arises from the possibility that we may not be able to satisfy current or future financial commitments or may become unduly reliant on alternative funding sources.  We establish liquidity risk guidelines that we review with the Enterprise Risk Committee of our Board of Directors and monitor through our Asset/Liability Executive Management Committee.  The objective of liquidity management is to ensure we have the ability to fund balance sheet growth and meet deposit and debt obligations in a timely and cost-effective manner.  Management monitors liquidity through a regular review of asset and liability maturities, funding sources, and loan and deposit forecasts.  We maintain strategic and contingency liquidity plans to ensure sufficient available funding to satisfy requirements for balance sheet growth, properly manage capital markets’ funding sources and to address unexpected liquidity requirements. On May 31, 2023, we filed an automatic shelf registration statement with the SEC that permits us to issue an unspecified amount of debt or equity securities.

Loan repayments and maturing investment securities are a relatively predictable source of funds.  However, deposit flows, calls of investment securities, and prepayments of loans and mortgage-related securities are not as predictable as they are strongly influenced by interest rates, the housing market, general and local economic conditions, and competition in the marketplace.  We continually monitor marketplace trends to identify patterns that might improve the predictability of the timing of deposit flows or asset prepayments.

A maturity schedule for Old National Bank’s time deposits is shown in the following table at September 30, 2023.

(dollars in thousands)
Maturity Bucket	Amount		Rate
2023	$	1,474,228	3.62	%
2024	3,832,949		4.33
2025	151,114		1.66
2026	66,492		0.91
2027	34,479		0.70
2027 and beyond	16,442		1.25
Total	$	5,575,704	4.00	%

Our ability to acquire funding at competitive prices is influenced by rating agencies’ views of our credit quality, liquidity, capital, and earnings.

The credit ratings of Old National and Old National Bank at September 30, 2023 are shown in the following table.

	Moody’s Investors Service
	Long-term	Short-term
Old National	Baa1	N/A
Old National Bank	A1	P-1

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Old National Bank maintains relationships in capital markets with brokers and dealers to issue certificates of deposit and short-term and medium-term bank notes as well.  At September 30, 2023, Old National and its subsidiaries had the following availability of liquid funds and borrowings:

(dollars in thousands)	Parent Company		Subsidiaries
Available liquid funds:
Cash and due from banks	$	1,409,813	$	253,617
Unencumbered government-issued debt securities	—		297,043
Unencumbered investment grade municipal securities	—		114,908
Unencumbered corporate securities	—		34,618
Availability of borrowings*:
Amount available from Federal Reserve discount window	—		875,670
Amount available from Federal Reserve Bank Term Funding Program	—		2,354,901
Amount available from Federal Home Loan Bank	—		5,536,299
Total available funds	$	1,409,813	$	9,467,056

* Based on collateral pledged

Old National Bancorp has routine funding requirements consisting primarily of operating expenses, dividends to shareholders, debt service, net derivative cash flows, and funds used for acquisitions.  Old National Bancorp can obtain funding to meet its obligations from dividends and management fees collected from its subsidiaries, operating line of credit, and through the issuance of debt securities.  Additionally, Old National Bancorp has a shelf registration in place with the SEC permitting ready access to the public debt and equity markets.  At September 30, 2023, Old National Bancorp’s other borrowings outstanding were $481.0 million. Management believes the Company has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short-term and the long-term.

Federal banking laws regulate the amount of dividends that may be paid by Old National Bank to Old National Bancorp on an unconsolidated basis without obtaining prior regulatory approval.  Prior regulatory approval is required if dividends to be declared in any year would exceed net earnings of the current year plus retained net profits for the preceding two years.  Prior regulatory approval to pay dividends was not required in 2022 and is not currently required.

CRITICAL ACCOUNTING ESTIMATES

Our most significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.  Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities.  We consider these policies to be our critical accounting estimates.  The judgment and assumptions made are based upon historical experience, future forecasts, or other factors that management believes to be reasonable under the circumstances.  Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations.

For additional information regarding critical accounting estimates, see the section titled “Critical Accounting Estimates” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2022.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk and Liquidity Risk.

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ITEM 4.  CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  Old National’s principal executive officer and principal financial officer have concluded that Old National’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended), based on their evaluation of these controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q, are effective at the reasonable assurance level as discussed below to ensure that information required to be disclosed by Old National in the reports it files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to Old National’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls.  Management, including our principal executive officer and principal financial officer, does not expect that Old National’s disclosure controls and internal controls will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be only reasonable assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, the system of controls may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting.  There were no changes in Old National’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, Old National’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1A.  RISK FACTORS

There have been no material changes from the risk factors disclosed in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
07/01/23 - 07/31/23	27,973	$	14.01	—	$	170,476,849
08/01/23 - 08/31/23	303	$	16.76	—	$	170,476,849
09/01/23 - 09/30/23	3,479	$	15.79	—	$	170,476,849
Total	31,755	$	14.24	—	$	170,476,849

(1)Consists of shares acquired pursuant to the Company’s share-based incentive programs. Under the terms of the Company’s share-based incentive programs, the Company accepts previously owned shares of common stock surrendered to satisfy tax withholding obligations associated with the vesting of restricted stock.

(2)On February 22, 2023, the Company issued a press release announcing that its Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $200 million of the Company’s outstanding shares of common stock, as conditions warrant, through February 29, 2024.

ITEM 5.  OTHER INFORMATION

(a)None

(b)There have been no material changes in the procedure by which security holders recommend nominees to the Company’s board of directors.

(c)During the three months ended September 30, 2023, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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ITEM 6.  EXHIBITS

Exhibit No.	Description
3.1	Fifth Amended and Restated Articles of Incorporation of Old National, amended April 30, 2020 (incorporated by reference to Exhibit 3.1 of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2020).
3.2	Articles of Amendment to the Fifth Amended and Restated Articles of Incorporation of Old National authorizing additional shares of Old National capital stock (incorporated by reference to Exhibit 3.2 of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2022).
3.3	Articles of Amendment to the Fifth Amended and Restated Articles of Incorporation of Old National designating the New Old National Series A Preferred Stock (incorporated by reference to Exhibit 3.3 of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2022).
3.4	Articles of Amendment to the Fifth Amended and Restated Articles of Incorporation of Old National designating the New Old National Series C Preferred Stock (incorporated by reference to Exhibit 3.4 of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2022).
3.5	Amended and Restated By-Laws of Old National, amended April 30, 2020 (incorporated by reference to Exhibit 3.2 of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2020).
3.6	Amendment to Amended and Restated By-Laws of Old National (incorporated by reference to Exhibit 3.6 of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2022).
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Old National’s Form 10-Q Report for the quarterly period ended September 30, 2023, formatted in inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (Loss), (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
104	The cover page from Old National’s Form 10-Q Report for the quarterly period ended September 30, 2023, formatted in inline XBRL and contained in Exhibit 101.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	OLD NATIONAL BANCORP
	(Registrant)
By:	/s/  Brendon B. Falconer
	Brendon B. Falconer
	Senior Executive Vice President and Chief Financial Officer
	Duly Authorized Officer and Principal Financial Officer
	Date:  November 1, 2023

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EX-31.1

Exhibit 31.1

FORM OF SECTION 302 CERTIFICATION

I, James C. Ryan, III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Old National Bancorp;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2023	By:	/s/  James C. Ryan, III
			James C. Ryan, III
			Chief Executive Officer
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

FORM OF SECTION 302 CERTIFICATION

I, Brendon B. Falconer, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Old National Bancorp;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2023	By:	/s/  Brendon B. Falconer
			Brendon B. Falconer
			Chief Financial Officer
			(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Old National Bancorp (the “Company”) on Form 10-Q for the quarter ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James C. Ryan, III, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/  James C. Ryan, III
	James C. Ryan, III
	Chief Executive Officer
	(Principal Executive Officer)
	Date:  November 1, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Old National Bancorp (the “Company”) on Form 10-Q for the quarter ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brendon B. Falconer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/  Brendon B. Falconer
	Brendon B. Falconer
	Chief Financial Officer
	(Principal Financial Officer)
	Date:  November 1, 2023

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Cover - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-15817
Entity Registrant Name	Old National Bancorp
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-1539838
Entity Address, Address Line One	One Main Street
Entity Address, City or Town	Evansville,
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47708
City Area Code	(800)
Local Phone Number	731-2265
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		292,621,000
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000707179
Current Fiscal Year End Date	--12-31
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common stock, no par value
Trading Symbol	ONB
Security Exchange Name	NASDAQ
Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A
Trading Symbol	ONBPP
Security Exchange Name	NASDAQ
Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C
Trading Symbol	ONBPO
Security Exchange Name	NASDAQ

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 381,343	$ 453,432
Money market and other interest-earning investments	1,282,087	274,980
Total cash and cash equivalents	1,663,430	728,412
Equity securities, at fair value	69,880	52,507
Investment securities - available-for-sale, at fair value (amortized cost $7,719,944 and $7,772,603, respectively)	6,414,761	6,773,712
Investment securities - held-to-maturity, at amortized cost (fair value $2,393,621 and $2,643,682, respectively)	3,027,914	3,089,147
Federal Home Loan Bank/Federal Reserve Bank stock, at cost	365,588	314,168
Loans held-for-sale, at fair value	122,033	11,926
Loans:
Total loans	32,577,834	31,123,641
Allowance for credit losses on loans	(303,982)	(303,671)
Net loans	32,273,852	30,819,970
Premises and equipment, net	565,607	557,307
Operating lease right-of-use assets	179,284	189,714
Accrued interest receivable	209,503	190,521
Goodwill	1,998,716	1,998,716
Other intangible assets	108,119	126,405
Company-owned life insurance	774,517	768,552
Other assets	1,286,244	1,142,315
Total assets	49,059,448	46,763,372
Deposits:
Noninterest-bearing demand	10,091,352	11,930,798
Interest-bearing:
Checking and NOW	7,495,417	8,340,955
Savings	5,296,985	6,326,158
Money market	8,793,218	5,389,139
Time deposits	5,575,704	3,013,780
Total deposits	37,252,676	35,000,830
Federal funds purchased and interbank borrowings	918	581,489
Securities sold under agreements to repurchase	279,061	432,804
Federal Home Loan Bank advances	4,412,576	3,829,018
Other borrowings	863,455	743,003
Operating lease liabilities	199,937	211,964
Accrued expenses and other liabilities	811,288	835,669
Total liabilities	43,819,911	41,634,777
Shareholders’ Equity
Preferred stock, 2,000 shares authorized, 231 shares issued and outstanding	230,500	230,500
Common stock, no par value, $1.00 per share stated value, 600,000 shares authorized,    292,586 and 292,903 shares issued and outstanding, respectively	292,586	292,903
Capital surplus	4,153,977	4,174,265
Retained earnings	1,531,289	1,217,349
Accumulated other comprehensive income (loss), net of tax	(968,815)	(786,422)
Total shareholders’ equity	5,239,537	5,128,595
Total liabilities and shareholders’ equity	49,059,448	46,763,372
Commercial
Loans:
Total loans	9,333,448	9,508,904
Allowance for credit losses on loans	(124,755)	(120,612)
Commercial real estate
Loans:
Total loans	13,916,221	12,457,070
Allowance for credit losses on loans	(144,975)	(138,244)
Residential real estate
Loans:
Total loans	6,696,288	6,460,441
Allowance for credit losses on loans	(20,780)	(21,916)
Consumer credit, net of unearned income
Loans:
Total loans	$ 2,631,877	$ 2,697,226

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Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Investment securities-available-for-sale, fair value	$ 7,719,944	$ 7,772,603
Investment securities - held-to-maturity, fair value	$ 2,393,621	$ 2,643,682
Preferred stock, shares authorized (in shares)	2,000	2,000
Preferred stock, shares issued (in shares)	231	231
Preferred stock, shares outstanding (in shares)	231	231
Common stock, stated value (in dollars per share)	$ 1.00	$ 1.00
Authorized and unissued common shares reserved for issuance (in shares)	600,000	600,000
Common stock, shares issued (in shares)	292,586	292,903
Common stock, shares outstanding (in shares)	292,586	292,903

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Consolidated Statements of Income (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Loans including fees:
Taxable	$ 474,387	$ 331,271	$ 1,334,658	$ 800,535
Nontaxable	11,181	6,461	32,318	14,770
Investment securities:
Taxable	66,924	56,765	191,797	145,633
Nontaxable	10,833	11,086	33,039	32,370
Money market and other interest-earning investments	13,194	935	25,258	3,073
Total interest income	576,519	406,518	1,617,070	996,381
Interest Expense
Deposits	147,428	10,820	310,995	19,201
Federal funds purchased and interbank borrowings	910	720	11,404	722
Securities sold under agreements to repurchase	710	106	2,389	287
Federal Home Loan Bank advances	40,382	13,027	123,466	25,915
Other borrowings	12,003	5,256	30,071	13,410
Total interest expense	201,433	29,929	478,325	59,535
Net interest income	375,086	376,589	1,138,745	936,846
Provision for credit losses	19,068	15,490	47,292	133,391
Net interest income after provision for credit losses	356,018	361,099	1,091,453	803,455
Noninterest Income
Wealth and investment services fees	26,687	25,359	80,128	75,183
Service charges on deposit accounts	18,524	20,042	53,278	54,392
Debit card and ATM fees	10,818	10,608	31,453	29,429
Mortgage banking revenue	5,063	5,360	12,628	19,127
Capital markets income	5,891	8,906	19,003	20,609
Company-owned life insurance	3,740	3,361	11,624	11,456
Debt securities gains (losses), net	(241)	(172)	(5,440)	85
Other income	10,456	6,921	30,574	24,461
Total noninterest income	80,938	80,385	233,248	234,742
Noninterest Expense
Salaries and employee benefits	131,541	147,203	404,715	433,167
Occupancy	25,795	26,418	80,162	73,933
Equipment	8,284	7,328	23,394	20,046
Marketing	9,448	10,361	28,698	23,756
Technology	20,592	20,269	59,850	64,914
Communication	4,075	5,392	12,768	14,687
Professional fees	5,956	6,559	19,085	32,686
FDIC assessment	9,000	6,249	29,028	13,523
Amortization of intangibles	6,040	7,089	18,286	19,070
Amortization of tax credit investments	2,644	2,662	8,167	5,703
Property optimization	0	0	1,559	0
Other expense	21,401	22,914	56,359	54,023
Total noninterest expense	244,776	262,444	742,071	755,508
Income before income taxes	192,180	179,040	582,630	282,689
Income tax expense	44,304	38,887	133,118	55,137
Net income	147,876	140,153	449,512	227,552
Preferred dividends	(4,034)	(4,034)	(12,101)	(10,084)
Net income applicable to common shareholders	$ 143,842	$ 136,119	$ 437,411	$ 217,468
Net income per common share - basic (in dollars per share)	$ 0.49	$ 0.47	$ 1.50	$ 0.81
Net income per common share - diluted (in dollars per share)	$ 0.49	$ 0.47	$ 1.50	$ 0.80
Weighted average number of common shares outstanding - basic (in shares)	290,648	290,961	290,763	269,843
Weighted average number of common shares outstanding - diluted (in shares)	291,717	292,483	291,809	271,123
Dividends per common share (in dollars per share)	$ 0.14	$ 0.14	$ 0.42	$ 0.42

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Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 147,876	$ 140,153	$ 449,512	$ 227,552
Change in debt securities available-for-sale:
Unrealized holding gains (losses) for the period	(208,626)	(285,798)	(304,061)	(1,019,782)
Reclassification for securities transferred to held-to-maturity	0	0	0	165,473
Reclassification adjustment for securities (gains) losses realized in income	241	172	5,440	(85)
Income tax effect	51,903	68,356	83,092	202,999
Unrealized gains (losses) on available-for-sale securities	(156,482)	(217,270)	(215,529)	(651,395)
Change in securities held-to-maturity:
Adjustment for securities transferred from available-for-sale	0	0	0	(165,473)
Amortization of unrealized losses on securities transferred     from available-for-sale	5,623	6,772	16,574	10,774
Income tax effect	(1,430)	(1,651)	(2,861)	37,621
Changes from securities held-to-maturity	4,193	5,121	13,713	(117,078)
Change in hedges:
Net unrealized derivative gains (losses) on hedges	(15,574)	(36,755)	45,547	(49,679)
Reclassification adjustment for (gains) losses realized in net income	4,927	749	(19,893)	(139)
Income tax effect	2,754	8,846	(6,094)	12,240
Changes from hedges	(7,893)	(27,160)	19,560	(37,578)
Change in defined benefit pension plans:
Amortization of net (gains) losses recognized in income	0	(11)	(182)	(32)
Income tax effect	0	3	45	8
Changes from defined benefit pension plans	0	(8)	(137)	(24)
Other comprehensive income (loss), net of tax	(160,182)	(239,317)	(182,393)	(806,075)
Comprehensive income (loss)	$ (12,306)	$ (99,164)	$ 267,119	$ (578,523)

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Consolidated Statements of Changes in Shareholders' Equity (unaudited) - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Capital Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period at Dec. 31, 2021	$ 3,012,018	$ 0	$ 165,838	$ 1,880,545	$ 968,010	$ (2,375)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(27,586)				(27,586)
Other comprehensive income (loss)	(335,824)					(335,824)
First Midwest Bancorp, Inc. merger:
Issuance of common stock	2,446,312		129,365	2,316,947
Issuance of preferred stock, net of issuance costs	243,719	230,500		13,219
Cash dividends:
Common	(40,782)				(40,782)
Preferred dividends	(2,017)				(2,017)
Common stock issued	165		10	155
Common stock repurchased	(70,078)		(3,890)	(66,188)
Share-based compensation expense	6,284			6,284
Stock activity under incentive compensation plans	(97)		1,636	(1,368)	(365)
Balance at end of period at Mar. 31, 2022	5,232,114	230,500	292,959	4,149,594	897,260	(338,199)
Balance at beginning of period at Dec. 31, 2021	3,012,018	0	165,838	1,880,545	968,010	(2,375)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	227,552
Other comprehensive income (loss)	(806,075)
First Midwest Bancorp, Inc. merger:
Issuance of common stock	2,446,312	243,870
Balance at end of period at Sep. 30, 2022	4,943,383	230,500	292,880	4,166,583	1,061,870	(808,450)
Balance at beginning of period at Mar. 31, 2022	5,232,114	230,500	292,959	4,149,594	897,260	(338,199)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	114,985				114,985
Other comprehensive income (loss)	(230,934)					(230,934)
Cash dividends:
Common	(40,901)				(40,901)
Preferred dividends	(4,033)				(4,033)
Common stock issued	162		10	152
Common stock repurchased	(322)		(21)	(301)
Share-based compensation expense	7,813			7,813
Stock activity under incentive compensation plans	(101)		(55)	285	(331)
Balance at end of period at Jun. 30, 2022	5,078,783	230,500	292,893	4,157,543	966,980	(569,133)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	140,153				140,153
Other comprehensive income (loss)	(239,317)					(239,317)
Cash dividends:
Common	(40,907)				(40,907)
Preferred dividends	(4,034)				(4,034)
Common stock issued	230		17	213
Common stock repurchased	(531)		(34)	(497)
Share-based compensation expense	7,485			7,485
Stock activity under incentive compensation plans	1,521		4	1,839	(322)
Balance at end of period at Sep. 30, 2022	4,943,383	230,500	292,880	4,166,583	1,061,870	(808,450)
Balance at beginning of period at Dec. 31, 2022	5,128,595	230,500	292,903	4,174,265	1,217,349	(786,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	146,600				146,600
Other comprehensive income (loss)	78,064					78,064
Cash dividends:
Common	(41,088)				(41,088)
Preferred dividends	(4,034)				(4,034)
Common stock issued	262		15	247
Common stock repurchased	(43,710)		(2,598)	(41,112)
Share-based compensation expense	12,742			12,742
Stock activity under incentive compensation plans	(5)		1,602	(1,412)	(195)
Balance at end of period at Mar. 31, 2023	5,277,426	230,500	291,922	4,144,730	1,318,632	(708,358)
Balance at beginning of period at Dec. 31, 2022	5,128,595	230,500	292,903	4,174,265	1,217,349	(786,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	449,512
Other comprehensive income (loss)	(182,393)
First Midwest Bancorp, Inc. merger:
Issuance of common stock	0	0
Balance at end of period at Sep. 30, 2023	5,239,537	230,500	292,586	4,153,977	1,531,289	(968,815)
Balance at beginning of period at Mar. 31, 2023	5,277,426	230,500	291,922	4,144,730	1,318,632	(708,358)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	155,036				155,036
Other comprehensive income (loss)	(100,275)					(100,275)
Cash dividends:
Common	(40,932)				(40,932)
Preferred dividends	(4,033)				(4,033)
Common stock issued	272		20	252
Common stock repurchased	(105)		(8)	(97)
Share-based compensation expense	5,247			5,247
Stock activity under incentive compensation plans	(541)		663	(1,043)	(161)
Balance at end of period at Jun. 30, 2023	5,292,095	230,500	292,597	4,149,089	1,428,542	(808,633)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	147,876				147,876
Other comprehensive income (loss)	(160,182)					(160,182)
Cash dividends:
Common	(40,933)				(40,933)
Preferred dividends	(4,034)				(4,034)
Common stock issued	263		20	243
Common stock repurchased	(451)		(31)	(420)
Share-based compensation expense	4,914			4,914
Stock activity under incentive compensation plans	(11)		0	151	(162)
Balance at end of period at Sep. 30, 2023	$ 5,239,537	$ 230,500	$ 292,586	$ 4,153,977	$ 1,531,289	$ (968,815)

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Consolidated Statements of Changes in Shareholders' Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Dividends per common share (in dollars per share)	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.42	$ 0.42

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Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows From Operating Activities
Net income	$ 449,512	$ 227,552
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	28,162	26,893
Amortization of other intangible assets	18,286	19,070
Amortization of tax credit investments	8,167	5,703
Net premium amortization on investment securities	8,673	14,625
Accretion income related to acquired loans	(17,484)	(63,472)
Share-based compensation expense	22,903	21,582
Provision for credit losses	47,292	133,391
Debt securities (gains) losses, net	5,440	(85)
Net (gains) losses on sales of loans and other assets	(727)	(5,911)
Increase in cash surrender value of company-owned life insurance	(11,624)	(11,456)
Residential real estate loans originated for sale	(366,340)	(490,288)
Proceeds from sales of residential real estate loans	366,485	531,121
(Increase) decrease in interest receivable	(18,982)	(29,088)
(Increase) decrease in other assets	(56,116)	36,049
Increase (decrease) in accrued expenses and other liabilities	(40,132)	271,625
Net cash flows provided by (used in) operating activities	443,515	687,311
Cash Flows From Investing Activities
Cash received from merger, net	0	1,912,629
Purchases of investment securities available-for-sale	(626,820)	(1,367,896)
Purchases of investment securities held-to-maturity	(1,941)	(156,378)
Purchases of Federal Home Loan Bank/Federal Reserve Bank stock	(99,158)	(115,488)
Purchases of equity securities	(20,862)	(5,843)
Proceeds from maturities, prepayments, and calls of investment securities available-for-sale	614,782	1,117,620
Proceeds from sales of investment securities available-for-sale	54,056	13,371
Proceeds from maturities, prepayments, and calls of investment securities held-to-maturity	76,276	61,172
Proceeds from sales of Federal Home Loan Bank/Federal Reserve Bank stock	47,738	108,697
Proceeds from sales of equity securities	2,610	52,034
Loan originations and payments, net	(2,269,544)	(2,481,620)
Proceeds from sales of commercial loans	679,952	0
Proceeds from company-owned life insurance death benefits	5,865	8,716
Proceeds from sales of premises and equipment and other assets	3,513	3,202
Purchases of premises and equipment and other assets	(28,074)	(28,739)
Net cash flows provided by (used in) investing activities	(1,561,607)	(878,523)
Net increase (decrease) in:
Deposits	2,251,846	235,064
Federal funds purchased and interbank borrowings	(580,571)	300,755
Securities sold under agreements to repurchase	(153,743)	(89,416)
Other borrowings	114,251	152,324
Payments for maturities of Federal Home Loan Bank advances	(1,850,150)	(1,674,875)
Proceeds from Federal Home Loan Bank advances	2,450,000	1,450,000
Cash dividends paid	(135,054)	(132,674)
Common stock repurchased	(44,266)	(70,931)
Common stock issued	797	557
Net cash flows provided by (used in) financing activities	2,053,110	170,804
Net increase (decrease) in cash and cash equivalents	935,018	(20,408)
Cash and cash equivalents at beginning of period	728,412	822,019
Cash and cash equivalents at end of period	1,663,430	801,611
Supplemental cash flow information:
Total interest paid	450,939	62,207
Total income taxes paid (net of refunds)	158,478	14,759
Issuance of common stock	0	2,446,312
Investment securities purchased but not settled	0	3,858
Securities transferred from available-for-sale to held-to-maturity	0	2,986,736
Operating lease right-of-use assets obtained in exchange for lease obligations	7,899	17,376
Finance lease right-of-use assets obtained in exchange for lease obligations	10,019	629
Preferred Stock
Supplemental cash flow information:
Issuance of common stock	$ 0	$ 243,870

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Basis of Presentation

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned subsidiaries (hereinafter collectively referred to as “Old National”) and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry.  Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of September 30, 2023 and December 31, 2022, and the results of its operations for the three and nine months ended September 30, 2023 and 2022.   Interim results do not necessarily represent annual results. Certain information and disclosures normally included in notes to consolidated annual financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to SEC rules and regulations. These financial statements should be read in conjunction with Old National’s Annual Report on Form 10-K for the year ended December 31, 2022.

All intercompany transactions and balances have been eliminated.  Certain prior year amounts have been reclassified to conform to the current presentation.  Such reclassifications had no effect on prior period net income or shareholders’ equity and were insignificant amounts.

Financial Difficulty Modifications

Any loans that are modified are reviewed by Old National to identify if a financial difficulty modification has occurred, which is when Old National Bank modifies a loan related to a borrower experiencing financial difficulties. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan, an extension of the maturity date, a permanent reduction of the recorded investment of the loan, or an other-than-insignificant payment delay. The adoption of ASU 2022-02 on January 1, 2023 eliminated the recognition and measurement of TDRs and enhanced disclosures for modifications to loans related to borrowers experiencing financial difficulties. See Note 2 to the consolidated financial statements for additional detail regarding the adoption of ASU 2022-02.

Other than the changes for financial difficulty modifications, there have been no material changes from the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Guidance Adopted in 2023

FASB ASC 805 – In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, to address diversity in practice and inconsistency related to the accounting for revenue contracts with customers acquired in a business combination. The amendments require that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Entities should apply the amendments prospectively to business combinations that occur after the effective date. The adoption of this guidance on January 1, 2023 did not have a material impact on the consolidated financial statements.

FASB ASC 815 – In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method and rename the last-of-layer method the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15,

2022, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2023 did not have a material impact on the consolidated financial statements.

FASB ASC 326 – In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, to eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The amendments require that an entity disclose current-period gross charge-offs by year of origination for financing receivables and net investment in leases within the vintage disclosures required by ASC 326. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Old National adopted the provision in ASU 2022-02 related to the recognition and measurement of TDRs on a prospective basis on January 1, 2023, which did not have a material impact on the consolidated financial statements.

FASB ASC 848 – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from LIBOR or other interbank offered rate on financial reporting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date of relief provisions within Topic 848 from December 31, 2022 to December 31, 2024. The objective of the guidance in Topic 848 is to provide relief during the transition period.

The amendments in this ASU are effective March 12, 2020 through December 31, 2024. Old National believes the adoption of this guidance on activities subsequent to September 30, 2023 will not have a material impact on the consolidated financial statements.

Accounting Guidance Pending Adoption 

FASB ASC 820 – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

FASB ASC 842 – In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements, which requires all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. Transition can be done either retrospectively or prospectively. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

FASB ASC 323 – In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

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Acquisition and Divestiture Activity

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition and Divestiture Activity

ACQUISITION AND DIVESTITURE ACTIVITY

Merger

First Midwest Bancorp, Inc.

On February 15, 2022, Old National completed its previously announced merger of equals transaction with First Midwest pursuant to an agreement and plan of merger, dated as of May 30, 2021, to combine in an all-stock transaction. The combined organization has a presence in additional Midwestern markets, strong commercial banking capabilities, a robust retail footprint, a significant wealth management platform, and an enhanced ability to attract talent. The combined organization also creates the scale and profitability to accelerate digital and technology capabilities to drive future investments in consumer and commercial banking, as well as wealth management services.

As of December 31, 2022, Old National finalized its valuation of all assets acquired and liabilities assumed. Transaction costs totaling $23.2 million associated with the merger have been expensed for the nine months ended September 30, 2023, compared to $100.6 million during the nine months ended September 30, 2022. Additional transaction and integration costs will be expensed in future periods as incurred.

Divestiture

On November 18, 2022, Old National completed its previously announced transaction with UMB, pursuant to which UMB acquired Old National’s business of acting as a qualified custodian for, and administering, health savings accounts. Old National served as custodian for health savings accounts comprised of both investment accounts and deposit accounts. At closing, the health savings accounts held in deposit accounts that were transferred totaled approximately $382 million and the transaction resulted in a $90.7 million pre-tax gain.

Pending Acquisition

CapStar Financial Holdings, Inc.

On October 26, 2023, Old National announced that it entered into a definitive merger agreement pursuant to which Old National will acquire CapStar Financial Holdings, Inc. (“CapStar”) and its wholly-owned subsidiary, CapStar Bank, in an all-stock transaction. This partnership transaction will strengthen Old National’s recently formed Nashville presence and add several new high-growth markets. As of September 30, 2023, CapStar had approximately $3.3 billion of total assets, $2.3 billion of total loans, and $2.8 billion of deposits. Under the terms of the merger agreement, each outstanding share of CapStar common stock will be converted into the right to receive 1.155 shares of Old National common stock, valuing the transaction at approximately $344.4 million, or $16.64 per share, based on Old National’s 30-day volume weighted average closing stock price ending October 25, 2023. The transaction value is likely to change until closing due to fluctuations in the price of Old National common stock. The definitive merger agreement has been approved by the Board of Directors of each company. The transaction remains subject to regulatory approval and the approval of CapStar shareholders. The transaction is anticipated to close in the second quarter of 2024.

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Net Income Per Common Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Income Per Common Share

NET INCOME PER COMMON SHARE

Basic and diluted net income per common share are calculated using the two-class method.  Net income applicable to common shares is divided by the weighted-average number of common shares outstanding during the period.  Adjustments to the weighted average number of common shares outstanding are made only when such adjustments will dilute net income per common share.  Net income applicable to common shares is then divided by the weighted-average number of common shares and common share equivalents during the period.

The following table presents the calculation of basic and diluted net income per common share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2023		2022		2023		2022
Net income	$	147,876	$	140,153	$	449,512	$	227,552
Preferred dividends	(4,034)		(4,034)		(12,101)		(10,084)
Net income applicable to common shares	$	143,842	$	136,119	$	437,411	$	217,468
Weighted average common shares outstanding:
Weighted average common shares outstanding (basic)	290,648		290,961		290,763		269,843
Effect of dilutive securities:
Restricted stock	1,069		1,516		1,045		1,273
Stock appreciation rights	—		6		1		7
Weighted average diluted shares outstanding	291,717		292,483		291,809		271,123
Basic Net Income Per Common Share	$	0.49	$	0.47	$	1.50	$	0.81
Diluted Net Income Per Common Share	$	0.49	$	0.47	$	1.50	$	0.80

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Investment Securities

9 Months Ended

Sep. 30, 2023

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 and held-to-maturity investment securities portfolios and the corresponding amounts of gross unrealized gains, unrealized losses, and basis adjustments in AOCI and gross unrecognized gains and losses.

(dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Basis Adjustments (1)		Fair Value
September 30, 2023
Available-for-Sale
U.S. Treasury	$	616,608	$	98	$	(10,258)	$	(58,322)	$	548,126
U.S. government-sponsored entities and agencies	1,475,307		—		(229,113)		(103,294)		1,142,900
Mortgage-backed securities - Agency	4,686,448		17		(823,760)		—		3,862,705
States and political subdivisions	592,495		7		(47,058)		(500)		544,944
Pooled trust preferred securities	13,794		—		(2,669)		—		11,125
Other securities	335,292		112		(30,443)		—		304,961
Total available-for-sale securities	$	7,719,944	$	234	$	(1,143,301)	$	(162,116)	$	6,414,761
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	824,223	$	—	$	(207,213)	$	—	$	617,010
Mortgage-backed securities - Agency	1,043,585		—		(195,933)		—		847,652
States and political subdivisions	1,160,256		—		(231,147)		—		929,109
Allowance for securities held-to-maturity	(150)		—		—		—		(150)
Total held-to-maturity securities	$	3,027,914	$	—	$	(634,293)	$	—	$	2,393,621
December 31, 2022
Available-for-Sale
U.S. Treasury	$	253,148	$	5	$	(5,189)	$	(47,037)	$	200,927
U.S. government-sponsored entities and agencies	1,451,736		—		(169,248)		(107,408)		1,175,080
Mortgage-backed securities - Agency	4,986,354		976		(617,428)		—		4,369,902
States and political subdivisions	688,159		1,789		(26,096)		—		663,852
Pooled trust preferred securities	13,783		—		(2,972)		—		10,811
Other securities	379,423		258		(26,541)		—		353,140
Total available-for-sale securities	$	7,772,603	$	3,028	$	(847,474)	$	(154,445)	$	6,773,712
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	819,168	$	—	$	(162,810)	$	—	$	656,358
Mortgage-backed securities - Agency	1,106,817		—		(123,854)		—		982,963
States and political subdivisions	1,163,312		221		(159,022)		—		1,004,511
Allowance for securities held-to-maturity	(150)		—		—		—		(150)
Total held-to-maturity securities	$	3,089,147	$	221	$	(445,686)	$	—	$	2,643,682

(1)    Basis adjustments represent the cumulative amount of fair value hedging adjustments included in the carrying amounts of fixed-rate investment securities assets designated in fair value hedging arrangements. See Note 15 to the consolidated financial statements for additional information regarding these derivative financial instruments.

Substantially all of the mortgage-backed securities in the investment portfolio are residential mortgage-backed securities.  

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 September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Proceeds	$	28,531	$	5,221	$	111,419	$	78,568
Realized gains	54		17		1,002		528
Realized losses	(295)		(189)		(6,442)		(443)

The table below shows the amortized cost and fair value of the investment securities portfolio 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.

	September 30, 2023
(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield
Maturity
Available-for-Sale
Within one year	$	539,157	$	535,193	4.71	%
One to five years	1,567,565		1,395,867		2.80
Five to ten years	3,987,461		3,285,183		2.37
Beyond ten years	1,625,761		1,198,518		2.46
Total	$	7,719,944	$	6,414,761	2.64	%
Held-to-Maturity
One to five years	$	161,837	$	127,716	2.68	%
Five to ten years	954,756		797,284		2.64
Beyond ten years	1,911,321		1,468,621		2.71
Total	$	3,027,914	$	2,393,621	2.69	%

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 months				12 months or longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2023
Available-for-Sale
U.S. Treasury	$	37,492	$	(144)	$	178,540	$	(10,114)	$	216,032	$	(10,258)
U.S. government-sponsored entities    and agencies	32,821		(58)		1,110,079		(229,055)		1,142,900		(229,113)
Mortgage-backed securities - Agency	124,895		(5,798)		3,736,306		(817,962)		3,861,201		(823,760)
States and political subdivisions	258,362		(7,749)		260,563		(39,309)		518,925		(47,058)
Pooled trust preferred securities	—		—		11,125		(2,669)		11,125		(2,669)
Other securities	11,737		(323)		262,912		(30,120)		274,649		(30,443)
Total available-for-sale	$	465,307	$	(14,072)	$	5,559,525	$	(1,129,229)	$	6,024,832	$	(1,143,301)
December 31, 2022
Available-for-Sale
U.S. Treasury	$	130,967	$	(3,264)	$	66,992	$	(1,925)	$	197,959	$	(5,189)
U.S. government-sponsored entities    and agencies	454,854		(75,795)		720,226		(93,453)		1,175,080		(169,248)
Mortgage-backed securities - Agency	3,207,319		(358,507)		1,116,205		(258,921)		4,323,524		(617,428)
States and political subdivisions	414,813		(25,555)		2,703		(541)		417,516		(26,096)
Pooled trust preferred securities	—		—		10,811		(2,972)		10,811		(2,972)
Other securities	257,775		(17,045)		75,309		(9,496)		333,084		(26,541)
Total available-for-sale	$	4,465,728	$	(480,166)	$	1,992,246	$	(367,308)	$	6,457,974	$	(847,474)

The following table summarizes the held-to-maturity investment securities with unrecognized losses aggregated by major security type and length of time in a continuous loss position:

	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
September 30, 2023
Held-to-Maturity
U.S. government-sponsored entities    and agencies	$	—	$	—	$	617,010	$	(207,213)	$	617,010	$	(207,213)
Mortgage-backed securities - Agency	—		—		847,652		(195,933)		847,652		(195,933)
States and political subdivisions	64,441		(4,877)		864,668		(226,270)		929,109		(231,147)
Total held-to-maturity	$	64,441	$	(4,877)	$	2,329,330	$	(629,416)	$	2,393,771	$	(634,293)
December 31, 2022
Held-to-Maturity
U.S. government-sponsored entities    and agencies	$	354,293	$	(110,523)	$	302,066	$	(52,287)	$	656,359	$	(162,810)
Mortgage-backed securities - Agency	367,849		(42,438)		615,114		(81,416)		982,963		(123,854)
States and political subdivisions	838,689		(127,355)		135,573		(31,667)		974,262		(159,022)
Total held-to-maturity	$	1,560,831	$	(280,316)	$	1,052,753	$	(165,370)	$	2,613,584	$	(445,686)

The unrecognized losses on held-to-maturity investment securities presented in the table above do not include unrecognized losses on securities that were transferred from available-for-sale to held-to-maturity totaling $132.3 million at September 30, 2023 and $148.9 million at December 31, 2022. These unrecognized losses are included as a separate component of shareholders’ equity and are being amortized over the remaining term of the securities.

No allowance for credit losses on available-for-sale debt securities was needed at September 30, 2023 or December 31, 2022.

An allowance on held-to-maturity debt securities is maintained for certain municipal bonds to account for expected lifetime credit losses. Substantially all of the U.S. government-sponsored entities and agencies and agency mortgage-backed securities 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. The allowance for credit losses on held-to-maturity debt securities was $0.2 million at September 30, 2023 and December 31, 2022.

Accrued interest receivable on the securities portfolio is excluded from the estimate of credit losses and totaled $38.0 million at September 30, 2023 and $50.9 million at December 31, 2022.

At September 30, 2023, Old National’s securities portfolio consisted of 3,007 securities, 2,917 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 and temporary market movements.  Old National’s pooled trust preferred securities are evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows.  At September 30, 2023, 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.

Old National’s two pooled trust preferred securities with fair values totaling $11.1 million and unrealized losses totaling $2.7 million 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. Old National did not recognize any losses on these securities for the nine months ended September 30, 2023 or 2022.

Equity Securities

Equity securities consist of mutual funds for Community Reinvestment Act qualified investments and diversified investment securities held in a grantor trust for participants in the Company’s nonqualified deferred compensation plan. Old National’s equity securities with readily determinable fair values totaled $69.9 million at September 30,

2023 and $52.5 million at December 31, 2022.  There were losses on equity securities of $0.8 million during the three months ended September 30, 2023 and losses of $1.4 million during the nine months ended September 30, 2023, compared to losses of $0.7 million and $4.9 million during the three and nine months ended September 30, 2022, respectively.

Alternative Investments

Old National has alternative investments without readily determinable fair values that are included in other assets totaling $418.3 million at September 30, 2023, consisting of $242.3 million of illiquid investments in partnerships, limited liability companies, and other ownership interests that support affordable housing and $176.0 million of economic development and community revitalization initiatives in low-to-moderate income neighborhoods. These alternative investments totaled $396.8 million at December 31, 2022.  There have been no impairments or adjustments on equity securities without readily determinable fair values, except for amortization of tax credit investments in the nine months ended September 30, 2023 and 2022. See Note 9 to the consolidated financial statements for detail regarding these investments.

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Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Loans and Allowance for Credit Losses

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans

Old National’s loans consist primarily of loans made to consumers and commercial clients in many diverse industries, including real estate rental and leasing, manufacturing, healthcare, wholesale trade, construction, and agriculture, among others.  Most of Old National’s lending activity occurs within our principal geographic markets in the Midwest region.  Old National manages concentrations of credit exposure by industry, product, geography, client relationship, and loan size.

The loan categories used to monitor and analyze interest income and yields are different than the portfolio segments used to determine the allowance for credit losses on loans. The allowance for credit losses was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. The four loan portfolios used to monitor and analyze interest income and yields – commercial, commercial real estate, residential real estate, and consumer – are reclassified into seven segments of loans – commercial, commercial real estate, BBCC, residential real estate, indirect, direct, and home equity for purposes of determining the allowance for credit losses on loans. The commercial and commercial real estate loan categories shown on the balance sheet include the same pool of loans as the commercial, commercial real estate, and BBCC portfolio segments. The consumer loan category shown on the balance sheet is comprised of the same loans in the indirect, direct, and home equity portfolio segments. The portfolio segment reclassifications follow:

	Balance Sheet Line Item		Portfolio Segment Reclassifications		After Reclassifications
(dollars in thousands)
September 30, 2023
Loans:
Commercial	$	9,333,448	$	(226,353)	$	9,107,095
Commercial real estate	13,916,221		(165,593)		13,750,628
BBCC	N/A		391,946		391,946
Residential real estate	6,696,288		—		6,696,288
Consumer	2,631,877		(2,631,877)		N/A
Indirect	N/A		1,047,224		1,047,224
Direct	N/A		542,689		542,689
Home equity	N/A		1,041,964		1,041,964
Total	$	32,577,834	$	—	$	32,577,834
December 31, 2022
Loans:
Commercial	$	9,508,904	$	(210,280)	$	9,298,624
Commercial real estate	12,457,070		(158,322)		12,298,748
BBCC	N/A		368,602		368,602
Residential real estate	6,460,441		—		6,460,441
Consumer	2,697,226		(2,697,226)		N/A
Indirect	N/A		1,034,257		1,034,257
Direct	N/A		629,186		629,186
Home equity	N/A		1,033,783		1,033,783
Total	$	31,123,641	$	—	$	31,123,641

The composition of loans by portfolio segment follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Commercial (1)	$	9,107,095	$	9,298,624
Commercial real estate	13,750,628		12,298,748
BBCC	391,946		368,602
Residential real estate	6,696,288		6,460,441
Indirect	1,047,224		1,034,257
Direct	542,689		629,186
Home equity	1,041,964		1,033,783
Total loans	32,577,834		31,123,641
Allowance for credit losses on loans	(303,982)		(303,671)
Net loans	$	32,273,852	$	30,819,970

(1)Includes direct finance leases of $173.0 million at September 30, 2023 and $188.1 million at December 31, 2022.

The risk characteristics of each loan portfolio segment are as follows:

Commercial

Commercial loans are classified primarily on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower.  The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value.  Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some loans may be made on an unsecured basis.  In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its clients.

Commercial Real Estate

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan.  Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy.  The properties securing Old National’s commercial real estate portfolio are diverse in terms of type and geographic location.  Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.

Included with commercial real estate are construction loans, which are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, financial analysis of the developers and property owners, and feasibility studies, if available.  Construction loans are generally based on estimates of costs and value associated with the complete project.  These estimates may be inaccurate.  Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project.  Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders (including Old National), sales of developed property, or an interim loan commitment from Old National until permanent financing is obtained.  These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

At 245%, Old National Bank’s applicable investor commercial real estate loans as a percentage of its risk-based capital remained below the regulatory guideline limit of 300% at September 30, 2023.

BBCC

BBCC loans are typically granted to small businesses with gross revenues of less than $5 million and aggregate debt of less than $1 million. Old National has established minimum debt service coverage ratios, minimum FICO scores for owners and guarantors, and the ability to show relatively stable earnings as criteria to help mitigate risk. Repayment of these loans depends on the personal income of the borrowers and the cash flows of the business. These factors can be affected by factors such as changes in economic conditions and unemployment levels.

Residential

With respect to residential loans that are secured by 1 - 4 family residences and are generally owner occupied, Old National typically establishes a maximum loan-to-value ratio and generally requires private mortgage insurance if that ratio is exceeded.  Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels.  Repayment can also be impacted by changes in residential property values.  Portfolio risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Indirect

Indirect loans are secured by automobile collateral, generally new and used cars and trucks from auto dealers that operate within our footprint. Old National typically mitigates the risk of indirect loans by establishing minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions

such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers, conservative credit policies, and ongoing reviews of dealer relationships.

Direct

Direct loans are typically secured by collateral such as auto or real estate or are unsecured. Old National has established conservative underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers along with conservative credit policies.

Home Equity

Home equity loans are generally secured by 1 - 4 family residences that are owner occupied. Old National has established conservative underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers, along with conservative credit policies as well as monitoring of updated borrower credit scores.

Allowance for Credit Losses

Loans

Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses on loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in underwriting new loans and in our process for estimating expected credit losses. Expected credit loss inherent in non-cancelable off-balance-sheet credit exposures is accounted for as a separate liability included in other liabilities on the balance sheet. The allowance for credit losses on loans held for investment is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Old National has made a policy election to report accrued interest receivable as a separate line item on the balance sheet. Accrued interest receivable on loans is excluded from the estimate of credit losses and totaled $162.8 million at September 30, 2023 and $137.7 million at December 31, 2022.

The allowance for credit loss estimation process involves procedures to appropriately consider the unique characteristics of our loan portfolio segments. These segments are further disaggregated into loan classes based on the level at which credit risk is monitored. When computing the level of expected credit losses, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status, and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods.

The allowance level is influenced by loan volumes, loan AQR migration or delinquency status, changes in historical loss experience, and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and second, a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics.

The base forecast scenario considers unemployment, gross domestic product, and the BBB ratio (BBB spread to the 10-year U.S. Treasury rate). In addition to the quantitative inputs, several qualitative factors are considered. These factors include the risk that unemployment, gross domestic product, housing product index, and the BBB ratio prove to be more severe and/or prolonged than our baseline forecast due to a variety of factors including monetary actions to control inflation, recent instability in the banking sector, conflict in Ukraine, and global supply chain issues. Old National’s activity in the allowance for credit losses on loans by portfolio segment was as follows:

(dollars in thousands)	Balance at Beginning of Period		Allowance Established for Acquired PCD Loans		Charge-offs		Recoveries		Provision for Loan Losses		Balance at End of Period
Three Months Ended September 30, 2023
Commercial	$	127,403	$	—	$	(16,705)	$	1,616	$	12,441	$	124,755
Commercial real estate	136,897		—		(2,291)		102		10,267		144,975
BBCC	2,776		—		(1,049)		70		912		2,709
Residential real estate	20,421		—		(15)		28		346		20,780
Indirect	1,407		—		(490)		325		79		1,321
Direct	4,755		—		(2,180)		580		416		3,571
Home equity	6,896		—		(20)		341		(1,346)		5,871
Total	$	300,555	$	—	$	(22,750)	$	3,062	$	23,115	$	303,982
Three Months Ended September 30, 2022
Commercial	$	102,819	$	3,740	$	(2,696)	$	2,206	$	6,344	$	112,413
Commercial real estate	141,802		6,818		(4,772)		287		(45)		144,090
BBCC	2,064		—		—		108		(4)		2,168
Residential real estate	19,729		—		(20)		66		1,481		21,256
Indirect	1,641		—		(624)		379		189		1,585
Direct	14,412		—		(3,299)		442		4,541		16,096
Home equity	5,536		—		(29)		357		(1,218)		4,646
Total	$	288,003	$	10,558	$	(11,440)	$	3,845	$	11,288	$	302,254
Nine Months Ended September 30, 2023
Commercial	$	120,612	$	—	$	(37,459)	$	3,713	$	37,889	$	124,755
Commercial real estate	138,244		—		(5,938)		1,394		11,275		144,975
BBCC	2,431		—		(1,171)		174		1,275		2,709
Residential real estate	21,916		—		(256)		153		(1,033)		20,780
Indirect	1,532		—		(2,089)		1,349		529		1,321
Direct	12,116		—		(8,018)		1,798		(2,325)		3,571
Home equity	6,820		—		(330)		471		(1,090)		5,871
Total	$	303,671	$	—	$	(55,261)	$	9,052	$	46,520	$	303,982
Nine Months Ended September 30, 2022
Commercial	$	27,232	$	38,780	$	(5,919)	$	3,219	$	49,101	$	112,413
Commercial real estate	64,004		49,419		(5,596)		789		35,474		144,090
BBCC	2,458		—		(48)		256		(498)		2,168
Residential real estate	9,347		136		(344)		636		11,481		21,256
Indirect	1,743		—		(1,636)		921		557		1,585
Direct	528		31		(6,550)		1,712		20,375		16,096
Home equity	2,029		723		(107)		540		1,461		4,646
Total	$	107,341	$	89,089	$	(20,200)	$	8,073	$	117,951	$	302,254

Unfunded Loan Commitments

Old National maintains an allowance for credit losses on unfunded loan commitments to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses on loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet within accrued expenses and other liabilities, while the corresponding provision for unfunded loan commitments is included in the provision for credit losses. Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Allowance for credit losses on unfunded loan commitments:
Balance at beginning of period	$	37,007	$	21,966	$	32,188	$	10,879
Provision for credit losses on unfunded loan commitments    acquired during the period	—		—		—		11,013
(Recapture of) provision for credit losses on unfunded loan    commitments	(4,047)		4,203		772		4,277
Balance at end of period	$	32,960	$	26,169	$	32,960	$	26,169

Credit Quality

Old National’s management monitors the credit quality of its loans on an ongoing basis with the AQR for commercial loans reviewed annually or at renewal and the performance of its residential and consumer loans based upon the accrual status refreshed at least quarterly.  Internally, management assigns an AQR to each non-homogeneous commercial, commercial real estate, and BBCC loan in the portfolio.  The primary determinants of the AQR are the reliability of the primary source of repayment and the past, present, and projected financial condition of the borrower.  The AQR will also consider current industry conditions.  Major factors used in determining the AQR can vary based on the nature of the loan, but commonly include factors such as debt service coverage, internal cash flow, liquidity, leverage, operating performance, debt burden, FICO scores, occupancy, interest rate sensitivity, and expense burden.  Old National uses the following definitions for risk ratings:

Criticized.  Special mention loans that have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Classified – Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Classified – Nonaccrual.  Loans classified as nonaccrual have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection in full, on the basis of currently existing facts, conditions, and values, in doubt.

Classified – Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as nonaccrual, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Pass rated loans are those loans that are other than criticized, classified – substandard, classified – nonaccrual, or classified – doubtful.

The following table summarizes the amortized cost of term loans by risk category of commercial, commercial real estate, and BBCC loans by loan portfolio segment, class of loan, and origination year:

(dollars in thousands)	Origination Year														Revolving to Term
	2023		2022		2021		2020		2019		Prior		Revolving				Total
September 30, 2023
Commercial:
Pass	$	1,615,716	$	1,690,168	$	1,095,758	$	553,187	$	479,907	$	501,610	$	2,000,147	$	454,995	$	8,391,488
Criticized	27,469		110,893		21,107		46,241		22,674		54,738		107,105		32,247		422,474
Classified:
Substandard	19,509		40,694		32,135		38,892		9,970		20,431		66,977		15,417		244,025
Nonaccrual	—		5,748		2,034		284		2,718		—		—		—		10,784
Doubtful	—		18,838		5,626		1,762		962		11,136		—		—		38,324
Total	$	1,662,694	$	1,866,341	$	1,156,660	$	640,366	$	516,231	$	587,915	$	2,174,229	$	502,659	$	9,107,095
Commercial real estate:
Pass	$	1,805,852	$	3,432,536	$	2,715,562	$	1,734,359	$	1,117,895	$	1,273,742	$	73,590	$	796,442	$	12,949,978
Criticized	58,440		62,461		42,128		28,716		27,978		90,549		9,959		21,023		341,254
Classified:
Substandard	21,214		84,269		23,589		16,822		78,165		41,313		—		50,424		315,796
Nonaccrual	—		2,983		11,470		1,428		52		11,385		—		792		28,110
Doubtful	—		1,649		33,564		4,142		38,199		37,936		—		—		115,490
Total	$	1,885,506	$	3,583,898	$	2,826,313	$	1,785,467	$	1,262,289	$	1,454,925	$	83,549	$	868,681	$	13,750,628
BBCC:
Pass	$	74,658	$	76,281	$	49,463	$	42,980	$	30,085	$	14,488	$	66,281	$	18,582	$	372,818
Criticized	2,295		2,469		1,114		76		1,110		—		2,470		2,264		11,798
Classified:
Substandard	98		733		619		24		401		1,196		100		438		3,609
Nonaccrual	216		451		310		340		—		87		477		278		2,159
Doubtful	—		865		492		50		67		88		—		—		1,562
Total	$	77,267	$	80,799	$	51,998	$	43,470	$	31,663	$	15,859	$	69,328	$	21,562	$	391,946

(dollars in thousands)	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Commercial:
Pass	$	2,388,618	$	1,754,364	$	796,340	$	738,208	$	362,986	$	388,617	$	1,988,763	$	329,119	$	8,747,015
Criticized	40,856		30,661		63,557		33,490		9,195		5,312		61,036		4,327		248,434
Classified:
Substandard	37,223		47,522		16,540		22,925		4,844		21,204		67,402		25,143		242,803
Nonaccrual	3,627		1,453		566		—		—		—		1,634		6,623		13,903
Doubtful	2,821		17,604		3,720		8,005		5,968		8,351		—		—		46,469
Total	$	2,473,145	$	1,851,604	$	880,723	$	802,628	$	382,993	$	423,484	$	2,118,835	$	365,212	$	9,298,624
Commercial real estate:
Pass	$	3,066,960	$	2,828,758	$	1,989,000	$	1,219,025	$	675,572	$	1,018,719	$	57,818	$	689,553	$	11,545,405
Criticized	75,306		34,422		22,569		82,637		86,504		56,864		—		23,282		381,584
Classified:
Substandard	46,231		16,928		24,319		78,468		57,824		21,591		—		4,108		249,469
Nonaccrual	3,151		9,541		5,014		—		2,312		22,155		—		3,257		45,430
Doubtful	1,934		38,386		10,011		4,605		1,523		20,401		—		—		76,860
Total	$	3,193,582	$	2,928,035	$	2,050,913	$	1,384,735	$	823,735	$	1,139,730	$	57,818	$	720,200	$	12,298,748
BBCC:
Pass	$	90,341	$	64,161	$	52,304	$	36,868	$	23,618	$	11,333	$	60,016	$	18,881	$	357,522
Criticized	1,504		525		368		692		353		—		1,006		1,603		6,051
Classified:
Substandard	811		143		—		421		—		—		543		682		2,600
Nonaccrual	42		37		118		—		429		284		—		639		1,549
Doubtful	40		107		439		157		64		73		—		—		880
Total	$	92,738	$	64,973	$	53,229	$	38,138	$	24,464	$	11,690	$	61,565	$	21,805	$	368,602

For residential real estate and consumer loan classes, Old National evaluates credit quality based on the aging status of the loan and by payment activity.  The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost of term residential real estate and consumer loans based on payment activity and origination year:

	Origination Year														Revolving to Term
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving				Total
September 30, 2023
Residential real estate:
Risk Rating:
Performing	$	362,518	$	1,504,933	$	1,861,729	$	1,732,039	$	444,411	$	750,037	$	—	$	279	$	6,655,946
Nonperforming	—		3,529		2,905		4,538		3,343		26,027		—		—		40,342
Total	$	362,518	$	1,508,462	$	1,864,634	$	1,736,577	$	447,754	$	776,064	$	—	$	279	$	6,696,288
Indirect:
Risk Rating:
Performing	$	309,220	$	390,012	$	181,235	$	96,148	$	46,877	$	19,666	$	—	$	196	$	1,043,354
Nonperforming	120		1,270		1,175		604		361		340		—		—		3,870
Total	$	309,340	$	391,282	$	182,410	$	96,752	$	47,238	$	20,006	$	—	$	196	$	1,047,224
Direct:
Risk Rating:
Performing	$	84,749	$	99,625	$	107,539	$	54,070	$	35,065	$	87,207	$	63,877	$	4,852	$	536,984
Nonperforming	87		486		522		403		316		3,874		6		11		5,705
Total	$	84,836	$	100,111	$	108,061	$	54,473	$	35,381	$	91,081	$	63,883	$	4,863	$	542,689
Home equity:
Risk Rating:
Performing	$	1	$	692	$	387	$	690	$	743	$	5,736	$	994,797	$	23,918	$	1,026,964
Nonperforming	—		24		219		203		758		4,810		1,692		7,294		15,000
Total	$	1	$	716	$	606	$	893	$	1,501	$	10,546	$	996,489	$	31,212	$	1,041,964

	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Residential real estate:
Risk Rating:
Performing	$	1,327,168	$	1,945,792	$	1,825,762	$	478,529	$	136,260	$	712,175	$	7	$	88	$	6,425,781
Nonperforming	59		529		861		873		1,826		30,512		—		—		34,660
Total	$	1,327,227	$	1,946,321	$	1,826,623	$	479,402	$	138,086	$	742,687	$	7	$	88	$	6,460,441
Indirect:
Risk Rating:
Performing	$	504,410	$	249,407	$	144,265	$	82,304	$	31,484	$	19,095	$	—	$	62	$	1,031,027
Nonperforming	348		1,074		645		531		304		328		—		—		3,230
Total	$	504,758	$	250,481	$	144,910	$	82,835	$	31,788	$	19,423	$	—	$	62	$	1,034,257
Direct:
Risk Rating:
Performing	$	132,934	$	164,126	$	77,406	$	57,919	$	45,299	$	59,212	$	87,622	$	671	$	625,189
Nonperforming	115		851		614		205		327		1,526		5		354		3,997
Total	$	133,049	$	164,977	$	78,020	$	58,124	$	45,626	$	60,738	$	87,627	$	1,025	$	629,186
Home equity:
Risk Rating:
Performing	$	919	$	896	$	1,849	$	1,497	$	983	$	11,646	$	990,001	$	14,792	$	1,022,583
Nonperforming	166		160		166		446		794		4,308		1,698		3,462		11,200
Total	$	1,085	$	1,056	$	2,015	$	1,943	$	1,777	$	15,954	$	991,699	$	18,254	$	1,033,783

The following table summarizes the gross charge-offs of loans by loan portfolio segment and origination year:

	Origination Year
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Three Months Ended September 30, 2023
Commercial	$	—	$	4,154	$	12,271	$	—	$	—	$	63	$	217	$	16,705
Commercial real estate	—		—		—		1,744		—		547		—		2,291
BBCC	499		501		49		—		—		—		—		1,049
Residential real estate	—		—		—		—		—		15		—		15
Indirect	75		276		86		12		10		31		—		490
Direct	19		429		423		112		270		60		867		2,180
Home equity	—		—		—		—		—		20		—		20
Total gross charge-offs	$	593	$	5,360	$	12,829	$	1,868	$	280	$	736	$	1,084	$	22,750
Nine Months Ended September 30, 2023
Commercial	$	—	$	6,254	$	23,432	$	120	$	6,789	$	302	$	562	$	37,459
Commercial real estate	—		54		735		2,144		—		3,005		—		5,938
BBCC	499		548		77		47		—		—		—		1,171
Residential real estate	—		—		—		—		—		256		—		256
Indirect	85		954		640		153		137		120		—		2,089
Direct	19		1,330		1,805		570		1,011		450		2,833		8,018
Home equity	—		—		—		—		—		330		—		330
Total gross charge-offs	$	603	$	9,140	$	26,689	$	3,034	$	7,937	$	4,463	$	3,395	$	55,261

Nonaccrual and Past Due Loans

Old National does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.

The following table presents the aging of the amortized cost basis in past due loans by class of loans:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Current		Total Loans
September 30, 2023
Commercial	$	2,754	$	4,214	$	12,504	$	19,472	$	9,087,623	$	9,107,095
Commercial real estate	15,954		6,295		21,366		43,615		13,707,013		13,750,628
BBCC	1,273		511		712		2,496		389,450		391,946
Residential	29,762		6,784		12,733		49,279		6,647,009		6,696,288
Indirect	5,576		1,368		1,156		8,100		1,039,124		1,047,224
Direct	3,626		1,059		1,588		6,273		536,416		542,689
Home equity	5,840		1,808		6,077		13,725		1,028,239		1,041,964
Total	$	64,785	$	22,039	$	56,136	$	142,960	$	32,434,874	$	32,577,834
December 31, 2022
Commercial	$	14,147	$	4,801	$	11,080	$	30,028	$	9,268,596	$	9,298,624
Commercial real estate	47,240		1,312		32,892		81,444		12,217,304		12,298,748
BBCC	730		365		603		1,698		366,904		368,602
Residential	24,181		5,033		11,753		40,967		6,419,474		6,460,441
Indirect	6,302		2,118		958		9,378		1,024,879		1,034,257
Direct	5,404		2,118		1,928		9,450		619,736		629,186
Home equity	6,585		1,966		4,707		13,258		1,020,525		1,033,783
Total	$	104,589	$	17,713	$	63,921	$	186,223	$	30,937,418	$	31,123,641

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing by class of loan:

	September 30, 2023						December 31, 2022
(dollars in thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or More and Accruing		Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or More and Accruing
Commercial	$	49,108	$	13,432	$	577	$	60,372	$	7,873	$	152
Commercial real estate	143,600		29,721		104		122,290		33,445		—
BBCC	3,721		—		—		2,429		—		—
Residential	40,342		—		—		34,660		—		1,808
Indirect	3,870		—		54		3,230		—		28
Direct	5,705		—		109		3,997		—		133
Home equity	15,000		—		348		11,200		—		529
Total	$	261,346	$	43,153	$	1,192	$	238,178	$	41,318	$	2,650

Interest income recognized on nonaccrual loans was insignificant during the three and nine months ended September 30, 2023 and 2022.

When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter-over-quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of collateral dependent loans by class of loan:

	Type of Collateral
(dollars in thousands)	Real Estate		Blanket Lien		Investment Securities/Cash		Auto		Other
September 30, 2023
Commercial	$	13,635	$	31,856	$	466	$	288	$	347
Commercial real estate	131,826		—		1,205		—		6,184
BBCC	2,131		1,174		—		416		—
Residential	40,342		—		—		—		—
Indirect	—		—		—		3,870		—
Direct	4,622		1		3		296		31
Home equity	15,000		—		—		—		—
Total loans	$	207,556	$	33,031	$	1,674	$	4,870	$	6,562
December 31, 2022
Commercial	$	8,962	$	42,754	$	2,690	$	1,611	$	980
Commercial real estate	108,871		—		1,718		—		6,411
BBCC	1,939		478		—		12		—
Residential	34,660		—		—		—		—
Indirect	—		—		—		3,230		—
Direct	2,991		13		—		232		23
Home equity	11,200		—		—		—		—
Total loans	$	168,623	$	43,245	$	4,408	$	5,085	$	7,414

Loan Participations

Old National has loan participations, which qualify as participating interests, with other financial institutions.  At September 30, 2023, these loans totaled $2.8 billion, of which $1.2 billion had been sold to other financial institutions and $1.6 billion was retained by Old National.  The loan participations convey proportionate ownership rights with equal priority to each participating interest holder; involve no recourse (other than ordinary representations and warranties) to, or subordination by, any participating interest holder; all cash flows are divided among the participating interest holders in proportion to each holder’s share of ownership; and no holder has the right to pledge the entire financial asset unless all participating interest holders agree.

Financial Difficulty Modifications

Occasionally, Old National modifies loans to borrowers experiencing financial difficulty in the form of principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction (or a combination thereof). When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses on loans.

The following table presents the amortized cost basis of financial difficulty modifications at September 30, 2023 that were modified during the three and nine months ended September 30, 2023 by class of loans and type of modification:

(dollars in thousands)	Term Extension		Total Class of Loans
Three Months Ended September 30, 2023
Commercial	$	3,502	0.0	%
Commercial real estate	93,844		0.7	%
Total	$	97,346	0.3	%
Nine Months Ended September 30, 2023
Commercial	$	20,811	0.2	%
Commercial real estate	116,580		0.8	%
Total	$	137,391	0.4	%

Old National closely monitors the performance of financial difficulty modifications to understand the effectiveness of its efforts. The following table presents the performance of loans identified as financial difficulty modifications at September 30, 2023:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Current		Total Loans
September 30, 2023
Commercial	$	—	$	—	$	2,541	$	2,541	$	18,270	$	20,811
Commercial real estate	1,086		—		—		1,086		115,494		116,580
Total	$	1,086	$	—	$	2,541	$	3,627	$	133,764	$	137,391

The following table summarizes the nature of the financial difficulty modifications during the three and nine months ended September 30, 2023 by class of loans:

(dollars in thousands)	Weighted- Average Term Extension (in months)
Three Months Ended September 30, 2023
Commercial	7.3
Commercial real estate	9.2
Total	9.2
Nine Months Ended September 30, 2023
Commercial	5.7
Commercial real estate	8.9
Total	8.4

There were no payment defaults on these loans subsequent to their modifications during the three and nine months ended September 30, 2023. At September 30, 2023, Old National had not committed to lend any material additional funds to the borrowers whose loans were modified due to financial difficulties.

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

LEASES

Old National has operating and finance leases for land, office space, banking centers, and equipment.  These leases are generally for periods of 5 to 20 years with various renewal options.  We include certain renewal options in the measurement of our right-of-use assets and lease liabilities if they are reasonably certain to be exercised.  Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred.  Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.

Old National has lease agreements with lease and non-lease components, which are generally accounted for separately.  For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.  For certain equipment leases, Old National accounts for the lease and non-lease components as a single lease component using the practical expedient available for that class of assets. Old National does not have any material sub-lease agreements.

The components of lease expense were as follows:

	Affected Line Item in the Statement of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Operating lease cost	Occupancy/Equipment expense	$	7,462	$	7,657	$	23,569	$	21,323
Finance lease cost:
Amortization of right-of-use assets	Occupancy expense	742		680		2,170		2,003
Interest on lease liabilities	Interest expense	183		105		536		315
Sub-lease income	Occupancy expense	(119)		(87)		(281)		(389)
Total		$	8,268	$	8,355	$	25,994	$	23,252

Supplemental balance sheet information related to leases was as follows:

(dollars in thousands)	September 30, 2023			December 31, 2022
Operating Leases
Operating lease right-of-use assets	$	179,284		$	189,714
Operating lease liabilities	199,937			211,964
Finance Leases
Premises and equipment, net	20,571			10,799
Other borrowings	21,595			13,469
Weighted-Average Remaining Lease Term (in Years)
Operating leases	8.5			9.1
Finance leases	10.6			7.2
Weighted-Average Discount Rate
Operating leases	2.93		%	2.88		%
Finance leases	3.89		%	3.30		%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,766	$	22,223
Operating cash flows from finance leases	536		315
Financing cash flows from finance leases	1,893		1,839

The following table presents a maturity analysis of the Company’s lease liability by lease classification at September 30, 2023:

(dollars in thousands)	Operating Leases		Finance Leases
2023	$	7,959	$	826
2024	31,183		3,357
2025	29,564		3,380
2026	28,622		2,154
2027	27,662		2,157
Thereafter	102,282		14,809
Total undiscounted lease payments	227,272		26,683
Amounts representing interest	(27,335)		(5,088)
Lease liability	$	199,937	$	21,595

Leases

LEASES

Old National has operating and finance leases for land, office space, banking centers, and equipment.  These leases are generally for periods of 5 to 20 years with various renewal options.  We include certain renewal options in the measurement of our right-of-use assets and lease liabilities if they are reasonably certain to be exercised.  Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred.  Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.

Old National has lease agreements with lease and non-lease components, which are generally accounted for separately.  For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.  For certain equipment leases, Old National accounts for the lease and non-lease components as a single lease component using the practical expedient available for that class of assets. Old National does not have any material sub-lease agreements.

The components of lease expense were as follows:

	Affected Line Item in the Statement of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Operating lease cost	Occupancy/Equipment expense	$	7,462	$	7,657	$	23,569	$	21,323
Finance lease cost:
Amortization of right-of-use assets	Occupancy expense	742		680		2,170		2,003
Interest on lease liabilities	Interest expense	183		105		536		315
Sub-lease income	Occupancy expense	(119)		(87)		(281)		(389)
Total		$	8,268	$	8,355	$	25,994	$	23,252

Supplemental balance sheet information related to leases was as follows:

(dollars in thousands)	September 30, 2023			December 31, 2022
Operating Leases
Operating lease right-of-use assets	$	179,284		$	189,714
Operating lease liabilities	199,937			211,964
Finance Leases
Premises and equipment, net	20,571			10,799
Other borrowings	21,595			13,469
Weighted-Average Remaining Lease Term (in Years)
Operating leases	8.5			9.1
Finance leases	10.6			7.2
Weighted-Average Discount Rate
Operating leases	2.93		%	2.88		%
Finance leases	3.89		%	3.30		%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,766	$	22,223
Operating cash flows from finance leases	536		315
Financing cash flows from finance leases	1,893		1,839

The following table presents a maturity analysis of the Company’s lease liability by lease classification at September 30, 2023:

(dollars in thousands)	Operating Leases		Finance Leases
2023	$	7,959	$	826
2024	31,183		3,357
2025	29,564		3,380
2026	28,622		2,154
2027	27,662		2,157
Thereafter	102,282		14,809
Total undiscounted lease payments	227,272		26,683
Amounts representing interest	(27,335)		(5,088)
Lease liability	$	199,937	$	21,595

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents the changes in the carrying amount of goodwill:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Balance at beginning of period	$	1,998,716	$	1,991,534	$	1,998,716	$	1,036,994
Acquisitions and adjustments	—		11,065		—		965,605
Balance at end of period	$	1,998,716	$	2,002,599	$	1,998,716	$	2,002,599

The increase in goodwill for the three and nine months ended September 30, 2022 was due to the First Midwest merger. See Note 3 to the consolidated financial statements for additional detail regarding this transaction.

Old National performed the required annual goodwill impairment test as of August 31, 2023 and concluded that there was no impairment.  No events or circumstances since the August 31, 2023 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists.

The gross carrying amounts and accumulated amortization of other intangible assets were as follows: 

(dollars in thousands)	Gross Carrying Amount		Accumulated Amortization and Impairment		Net Carrying Amount
September 30, 2023
Core deposit	$	143,511	$	(68,312)	$	75,199
Customer trust relationships	52,621		(19,701)		32,920
Total other intangible assets	$	196,132	$	(88,013)	$	108,119
December 31, 2022
Core deposit	$	170,642	$	(80,951)	$	89,691
Customer trust relationships	56,243		(19,529)		36,714
Total other intangible assets	$	226,885	$	(100,480)	$	126,405

Other intangible assets consist of core deposit intangibles and customer relationship intangibles and are being amortized primarily on an accelerated basis over their estimated useful lives, generally over a period of 5 to 15 years.

Old National reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. No impairment charges were recorded during the nine months ended September 30, 2023 or 2022.  Total amortization expense associated with intangible assets was

$6.0 million and $18.3 million for the three and nine months ended September 30, 2023, respectively, compared to $7.1 million and $19.1 million for the three and nine months ended September 30, 2022, respectively.

Estimated amortization expense for future years is as follows:

(dollars in thousands)
2023 remaining	$	5,869
2024	21,239
2025	18,358
2026	15,555
2027	12,867
Thereafter	34,231
Total	$	108,119

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Qualified Affordable Housing Projects and Other Tax Credit Investments

9 Months Ended

Sep. 30, 2023

Investments in Affordable Housing Projects [Abstract]

Qualified Affordable Housing Projects and Other Tax Credit Investments

QUALIFIED AFFORDABLE HOUSING PROJECTS AND OTHER TAX CREDIT INVESTMENTS

Old National is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects.  These investments are included in other assets on the balance sheet, with any unfunded commitments included with other liabilities. As of September 30, 2023, Old National expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

The following table summarizes Old National’s investments in qualified affordable housing projects and other tax credit investments:

(dollars in thousands)		September 30, 2023				December 31, 2022
Investment	Accounting Method	Investment		Unfunded Commitment (1)		Investment		Unfunded Commitment
LIHTC	Proportional amortization	$	93,214	$	54,440	$	84,428	$	55,754
FHTC	Equity	36,715		27,214		19,316		9,588
NMTC	Consolidation	45,637		—		51,912		—
Renewable Energy	Equity	385		—		1,099		—
Total		$	175,951	$	81,654	$	156,755	$	65,342

(1)All commitments will be paid by Old National by December 31, 2027.

The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments:

(dollars in thousands)	Amortization Expense (1)		Tax Expense (Benefit) Recognized (2)
Three Months Ended September 30, 2023
LIHTC	$	3,208	$	(3,582)
FHTC	330		(399)
NMTC	2,092		(2,611)
Renewable Energy	222		—
Total	$	5,852	$	(6,592)
Three Months Ended September 30, 2022
LIHTC	$	1,240	$	(1,650)
FHTC	215		(262)
NMTC	2,237		(2,788)
Renewable Energy	210		—
Total	$	3,902	$	(4,700)
Nine Months Ended September 30, 2023
LIHTC	$	6,135	$	(7,398)
FHTC	1,178		(1,423)
NMTC	6,275		(7,833)
Renewable Energy	714		—
Total	$	14,302	$	(16,654)
Nine Months Ended September 30, 2022
LIHTC	$	3,734	$	(4,950)
FHTC	635		(776)
NMTC	4,439		(5,538)
Renewable Energy	629		—
Total	$	9,437	$	(11,264)

(1)The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, and Renewable Energy tax credits is included in noninterest expense.

(2)All of the tax benefits recognized are included in our income tax expense.  The tax benefit recognized for the FHTC, NMTC, and Renewable Energy investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).

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Securities Sold Under Agreements to Repurchase

9 Months Ended

Sep. 30, 2023

Securities Sold under Agreements to Repurchase [Abstract]

Securities Sold Under Agreements to Repurchase

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are secured borrowings.  Old National pledges investment securities to secure these borrowings. The following table presents securities sold under agreements to repurchase and related weighted-average interest rates:

	At or for the Nine Months Ended September 30,
(dollars in thousands)	2023			2022
Outstanding at period end	$	279,061		$	438,053
Average amount outstanding during the period	351,362			450,966
Maximum amount outstanding at any month-end during the period	430,537			509,275
Weighted-average interest rate:
During the period	0.91		%	0.09		%
At period end	1.35		%	0.40		%

At December 31, 2022, securities sold under agreements to repurchase totaled $432.8 million with a weighted-average interest rate of 1.31%.

The following table presents the contractual maturity of our secured borrowings and class of collateral pledged:

	At September 30, 2023
	Remaining Contractual Maturity of the Agreements
(dollars in thousands)	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 days		Total
Repurchase Agreements:
U.S. Treasury and agency securities	$	279,061	$	—	$	—	$	—	$	279,061
Total	$	279,061	$	—	$	—	$	—	$	279,061

The fair value of securities pledged to secure repurchase agreements may decline.  Old National has pledged securities valued at 107% of the gross outstanding balance of repurchase agreements at September 30, 2023 to manage this risk.

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Federal Home Loan Bank Advances

9 Months Ended

Sep. 30, 2023

Federal Home Loan Banks [Abstract]

Federal Home Loan Bank Advances

FEDERAL HOME LOAN BANK ADVANCES

The following table summarizes Old National Bank’s FHLB advances:

(dollars in thousands)	September 30, 2023		December 31, 2022
FHLB advances (fixed rates 0.00% to 5.61%    and variable rates 5.35% to 5.36%) maturing    December 2023 to September 2042	$	4,450,528	$	3,850,677
Fair value hedge basis adjustments and unamortized    prepayment fees	(37,952)		(21,659)
Total	$	4,412,576	$	3,829,018

FHLB advances had weighted-average rates of 3.36% at September 30, 2023 and 3.15% at December 31, 2022. Certain FHLB advances are collateralized with loans and investment securities up to 190%.

At September 30, 2023, total unamortized prepayment fees related to debt modifications completed in prior years totaled $15.7 million, compared to $20.2 million at December 31, 2022.

Contractual maturities of FHLB advances at September 30, 2023 were as follows:

(dollars in thousands)
Due in 2023	$	100,000
Due in 2024	25,243
Due in 2025	550,285
Due in 2026	100,000
Thereafter	3,675,000
Fair value hedge basis adjustments and unamortized prepayment fees	(37,952)
Total	$	4,412,576

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Other Borrowings

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Other Borrowings

OTHER BORROWINGS

The following table summarizes Old National’s other borrowings:

(dollars in thousands)	September 30, 2023		December 31, 2022
Old National Bancorp:
Senior unsecured notes (fixed rate 4.125%) maturing August 2024	$	175,000	$	175,000
Unamortized debt issuance costs related to senior unsecured notes	(130)		(247)
Subordinated debentures (fixed rate 5.875%) maturing September 2026	150,000		150,000
Junior subordinated debentures (rates of 6.95% to 9.21%) maturing    July 2031 to September 2037	136,643		136,643
Other basis adjustments	19,496		23,363
Old National Bank:
Finance lease liabilities	21,595		13,469
Subordinated debentures (variable rate 9.99%) maturing October 2025	12,000		12,000
Leveraged loans for NMTC (fixed rates of 1.00% to 1.43%)    maturing December 2046 to June 2060	143,745		143,187
Other (1)	205,106		89,588
Total other borrowings	$	863,455	$	743,003

(1)Includes overnight borrowings to collateralize certain derivative positions totaling $204.5 million at September 30, 2023 and $88.0 million at December 31, 2022.

Contractual maturities of other borrowings at September 30, 2023 were as follows:

(dollars in thousands)
Due in 2023	$	205,160
Due in 2024	177,653
Due in 2025	14,740
Due in 2026	151,576
Due in 2027	1,636
Thereafter	292,738
Unamortized debt issuance costs and other basis adjustments	19,952
Total	$	863,455

Junior Subordinated Debentures

Junior subordinated debentures related to trust preferred securities are classified in “other borrowings.”  Junior subordinated debentures qualify as Tier 2 capital for regulatory purposes, subject to certain limitations.

Through various mergers and acquisitions, Old National assumed junior subordinated debenture obligations related to various trusts that issued trust preferred securities.  Old National guarantees the payment of distributions on the trust preferred securities issued by the trusts.  Proceeds from the issuance of each of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by the trusts.

Old National, at any time, may redeem the junior subordinated debentures at par and, thereby cause a redemption of the trust preferred securities in whole or in part.

The following table summarizes the terms of our outstanding junior subordinated debentures at September 30, 2023:

(dollars in thousands)					Rate at September 30, 2023
Name of Trust	Issuance Date	Issuance Amount		Rate		Maturity Date
Bridgeview Statutory Trust I	July 2001	$	15,464	3-month SOFR plus 3.58%	9.21%	July 31, 2031
Bridgeview Capital Trust II	December 2002	15,464		3-month SOFR plus 3.35%	8.92%	January 7, 2033
First Midwest Capital Trust I	November 2003	37,825		6.95% fixed	6.95%	December 1, 2033
St. Joseph Capital Trust II	March 2005	5,155		3-month SOFR plus 1.75%	7.42%	March 17, 2035
Northern States Statutory Trust I	September 2005	10,310		3-month SOFR plus 1.80%	7.47%	September 15, 2035
Anchor Capital Trust III	August 2005	5,000		3-month SOFR plus 1.55%	7.21%	September 30, 2035
Great Lakes Statutory Trust II	December 2005	6,186		3-month SOFR plus 1.40%	7.07%	December 15, 2035
Home Federal Statutory    Trust I	September 2006	15,464		3-month SOFR plus 1.65%	7.32%	September 15, 2036
Monroe Bancorp Capital    Trust I	July 2006	3,093		3-month SOFR plus 1.60%	7.17%	October 7, 2036
Tower Capital Trust 3	December 2006	9,279		3-month SOFR plus 1.69%	7.36%	March 1, 2037
Monroe Bancorp Statutory    Trust II	March 2007	5,155		3-month SOFR plus 1.60%	7.27%	June 15, 2037
Great Lakes Statutory Trust III	June 2007	8,248		3-month SOFR plus 1.70%	7.37%	September 15, 2037
Total		$	136,643

Subordinated Debentures

Old National assumed $12.0 million of subordinated fixed-to-floating notes related to the acquisition of Anchor Bancorp, Inc. (MN).  The debentures currently have a floating rate of interest equal to the three-month term SOFR rate plus 4.618%.

Old National assumed $150.0 million of subordinated fixed rate notes related to the First Midwest merger. The subordinated debentures have a 5.875% fixed rate of interest through the September 29, 2026 maturity date.

Leveraged Loans

The leveraged loans are directly related to the NMTC structure. As part of the transaction structure, Old National has the right to sell its interest in the entity that received the leveraged loans at an agreed upon price to the leveraged lender at the end of the NMTC seven-year compliance period. See Note 9 to the consolidated financial statements for additional information on the Company’s NMTC investments.

Finance Lease Liabilities

Old National has long-term finance lease liabilities for certain banking centers and equipment totaling $21.6 million at September 30, 2023.  See Note 7 to the consolidated financial statements for a maturity analysis of the Company’s finance lease liabilities.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes within each classification of AOCI, net of tax:

(dollars in thousands)	Unrealized Gains and Losses on Available- for-Sale Debt Securities		Unrealized Gains and Losses on Held-to- Maturity Securities		Gains and Losses on Hedges		Defined Benefit Pension Plans		Total
Three Months Ended September 30, 2023
Balance at beginning of period	$	(701,393)	$	(103,144)	$	(4,096)	$	—	$	(808,633)
Other comprehensive income (loss) before    reclassifications	(156,660)		—		(11,546)		—		(168,206)
Amounts reclassified from AOCI to income (1)	178		4,193		3,653		—		8,024
Balance at end of period	$	(857,875)	$	(98,951)	$	(11,989)	$	—	$	(968,815)
Three Months Ended September 30, 2022
Balance at beginning of period	$	(437,075)	$	(122,199)	$	(9,875)	$	16	$	(569,133)
Other comprehensive income (loss) before    reclassifications	(217,401)		—		(27,725)		—		(245,126)
Amounts reclassified from AOCI to income (1)	131		5,121		565		(8)		5,809
Balance at end of period	$	(654,345)	$	(117,078)	$	(37,035)	$	8	$	(808,450)
Nine Months Ended September 30, 2023
Balance at beginning of period	$	(642,346)	$	(112,664)	$	(31,549)	$	137	$	(786,422)
Other comprehensive income (loss) before    reclassifications	(219,562)		1,325		34,279		—		(183,958)
Amounts reclassified from AOCI to income (1)	4,033		12,388		(14,719)		(137)		1,565
Balance at end of period	$	(857,875)	$	(98,951)	$	(11,989)	$	—	$	(968,815)
Nine Months Ended September 30, 2022
Balance at beginning of period	$	(2,950)	$	—	$	543	$	32	$	(2,375)
Other comprehensive income (loss) before    reclassifications	(651,330)		(125,229)		(37,473)		—		(814,032)
Amounts reclassified from AOCI to income (1)	(65)		8,151		(105)		(24)		7,957
Balance at end of period	$	(654,345)	$	(117,078)	$	(37,035)	$	8	$	(808,450)

(1)See table below for details about reclassifications to income.

The following table summarizes the amounts reclassified out of each component of AOCI for the three months ended September 30, 2023 and 2022:

	Three Months Ended September 30,
(dollars in thousands)	2023		2022
Details about AOCI Components	Amount Reclassified from AOCI				Affected Line Item in the Statement of Income
Unrealized gains and losses on    available-for-sale securities	$	(241)	$	(172)	Debt securities gains (losses), net
	63		41		Income tax (expense) benefit
	$	(178)	$	(131)	Net income (loss)
Unrealized gains and losses on    held-to-maturity securities	$	(5,623)	$	(6,772)	Interest income (expense)
	1,430		1,651		Income tax (expense) benefit
	$	(4,193)	$	(5,121)	Net income (loss)
Gains and losses on hedges    Interest rate contracts	$	(4,927)	$	(749)	Interest income (expense)
	1,274		184		Income tax (expense) benefit
	$	(3,653)	$	(565)	Net income (loss)
Amortization of defined benefit    pension items
Actuarial gains (losses)	$	—	$	11	Salaries and employee benefits
	—		(3)		Income tax (expense) benefit
	$	—	$	8	Net income (loss)
Total reclassifications for the period	$	(8,024)	$	(5,809)	Net income (loss)

The following table summarizes the amounts reclassified out of each component of AOCI for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Details about AOCI Components	Amount Reclassified from AOCI				Affected Line Item in the Statement of Income
Unrealized gains and losses on    available-for-sale securities	$	(5,440)	$	85	Debt securities gains (losses), net
	1,407		(20)		Income tax (expense) benefit
	$	(4,033)	$	65	Net income (loss)
Unrealized gains and losses on    held-to-maturity securities	$	(16,574)	$	(10,774)	Interest income (expense)
	4,186		2,623		Income tax (expense) benefit
	$	(12,388)	$	(8,151)	Net income (loss)
Gains and losses on hedges    Interest rate contracts	$	19,893	$	139	Interest income (expense)
	(5,174)		(34)		Income tax (expense) benefit
	$	14,719	$	105	Net income (loss)
Amortization of defined benefit    pension items
Actuarial gains (losses)	$	182	$	32	Salaries and employee benefits
	(45)		(8)		Income tax (expense) benefit
	$	137	$	24	Net income (loss)
Total reclassifications for the period	$	(1,565)	$	(7,957)	Net income (loss)

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Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2023			2022			2023			2022
Provision at statutory rate of 21%	$	40,358		$	37,598		$	122,352		$	59,365
Tax-exempt income:
Tax-exempt interest	(4,625)			(3,929)			(13,716)			(10,335)
Section 291/265 interest disallowance	675			85			1,593			150
Company-owned life insurance income	(743)			(684)			(2,315)			(2,340)
Tax-exempt income	(4,693)			(4,528)			(14,438)			(12,525)
State income taxes	8,163			7,050			24,856			7,808
Interim period effective rate adjustment	116			(31)			(607)			3,042
Tax credit investments - federal	(2,071)			(2,407)			(7,122)			(4,968)
Officer compensation limitation	1,040			401			3,120			1,053
Non-deductible FDIC premiums	1,949			1,178			6,096			2,549
Other, net	(558)			(374)			(1,139)			(1,187)
Income tax expense (benefit)	$	44,304		$	38,887		$	133,118		$	55,137
Effective tax rate	23.1		%	21.7		%	22.9		%	19.5		%

The provision for income taxes was recorded at September 30, 2023 and 2022 based on the current estimate of the effective annual rate.

The higher effective tax rate during the nine months ended September 30, 2023 compared to the same period in 2022 reflected an increase in pre-tax book income combined with smaller increases in tax-exempt income and tax credits. Other contributing factors were increases in non-deductible officer compensation and non-deductible FDIC premiums as well as the First Midwest merger in February 2022.

Net Deferred Tax Assets

Net deferred tax assets are included in other assets on the balance sheet. At September 30, 2023, net deferred tax assets totaled $480.7 million, compared to $435.8 million at December 31, 2022. No valuation allowance was required on the Company’s deferred tax assets at September 30, 2023 or December 31, 2022.

The Company’s retained earnings at September 30, 2023 included an appropriation for acquired thrifts’ tax bad debt allowances totaling $58.6 million for which no provision for federal or state income taxes has been made.  If in the future, this portion of retained earnings were distributed as a result of the liquidation of the Company or its subsidiaries, federal and state income taxes would be imposed at the then applicable rates.

Old National has federal net operating loss carryforwards totaling $68.4 million at September 30, 2023 and $81.5 million at December 31, 2022.  This federal net operating loss was acquired from the acquisition of Anchor BanCorp Wisconsin Inc. in 2016 and First Midwest in 2022.  If not used, the federal net operating loss carryforwards will begin expiring in 2030 and later.  Old National has recorded state net operating loss carryforwards totaling $115.6 million at September 30, 2023 and $124.4 million at December 31, 2022.  If not used, the state net operating loss carryforwards will expire from 2027 to 2036.

The federal and recorded state net operating loss carryforwards are subject to an annual limitation under Internal Revenue Code section 382.  Old National believes that all of the federal and recorded state net operating loss carryforwards will be used prior to expiration.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

As part of our overall interest rate risk management, Old National uses derivative instruments, including interest rate swaps, collars, caps, and floors.  The notional amount does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative instruments are recognized on the balance sheet at their fair value and are not reported on a net basis.

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts.  Old National’s exposure is limited to the termination value of the contracts rather than the notional, principal, or contract amounts.  There are provisions in our agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold.  Exposures in excess of the agreed thresholds are collateralized.  In addition, we minimize credit risk through credit approvals, limits, and monitoring procedures.

Derivatives Designated as Hedges

Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as part of a hedging relationship are accounted for in the following manner:

Cash flow hedges: changes in fair value are recognized as a component in other comprehensive income (loss).

Fair value hedges: changes in fair value are recognized concurrently in earnings.

As long as a hedging instrument is designated and the results of the effectiveness testing support that the instrument qualifies for hedge accounting treatment, 100% of the periodic changes in fair value of the hedging instrument are accounted for as outlined above. This is the case whether or not economic mismatches exist in the hedging relationship. As a result, there is no periodic measurement or recognition of ineffectiveness. Rather, the full impact of hedge gains and losses is recognized in the period in which the hedged transactions impact earnings.

The change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness is presented in the same income statement line item that is used to present the earnings effect of the hedged item.

Cash Flow Hedges

Interest rate swaps of certain borrowings were designated as cash flow hedges totaling $150.0 million notional amount at both September 30, 2023 and December 31, 2022. Interest rate collars and floors related to variable-rate commercial loan pools were designated as cash flow hedges totaling $1.5 billion notional amount at September 30, 2023 and $1.9 billion notional amount at December 31, 2022. The hedges were determined to be effective during all periods presented and we expect them to remain effective during the remaining terms.

Old National has designated its interest rate collars as cash flow hedges.  The structure of these instruments is such that Old National pays the counterparty an incremental amount if the collar index exceeds the cap rate.  Conversely, Old National receives an incremental amount if the index falls below the floor rate.  No payments are required if the collar index falls between the cap and floor rates. 

Old National has designated its interest rate floor transactions as cash flow hedges.  The structure of these instruments is such that Old National receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate.

Fair Value Hedges

Interest rate swaps of certain borrowings were designated as fair value hedges totaling $700.0 million notional amount at September 30, 2023 and $300.0 million notional amount at December 31, 2022. Interest rate swaps of certain available-for-sale investment securities were designated as fair value hedges totaling $998.1 million notional amount at September 30, 2023 and $910.0 million notional amount at December 31, 2022. The hedges were determined to be effective during all periods presented and we expect them to remain effective during the remaining terms.

The following table summarizes Old National’s derivatives designated as hedges:

	September 30, 2023						December 31, 2022
			Fair Value						Fair Value
(dollars in thousands)	Notional		Assets (1)		Liabilities (2)		Notional		Assets (1)		Liabilities (2)
Cash flow hedges
Interest rate collars and floors on loan pools	$	1,500,000	$	2,214	$	27,749	$	1,900,000	$	11,764	$	47,859
Interest rate swaps on borrowings (3)	150,000		—		—		150,000		—		—
Fair value hedges
Interest rate swaps on investment securities (3)	998,107		—		—		909,957		—		—
Interest rate swaps on borrowings (3)	700,000		—		—		300,000		—		—
Total			$	2,214	$	27,749			$	11,764	$	47,859

(1)Derivative assets are included in other assets on the balance sheet.

(2)Derivative liabilities are included in other liabilities on the balance sheet.

(3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally cleared variation margin rules.

The effect of derivative instruments in fair value hedging relationships on the consolidated statements of income were as follows:

(dollars in thousands)						Gain (Loss) Recognized in Income on Related Hedged Items
Derivatives in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative		Hedged Items in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in in Income on Related Hedged Item
Three Months Ended September 30, 2023
Interest rate contracts	Interest income/(expense)	$	(9,553)	Fixed-rate debt	Interest income/(expense)	$	9,566
Interest rate contracts	Interest income/(expense)	45,537		Fixed-rate investment securities	Interest income/(expense)	(46,055)
Total		$	35,984			$	(36,489)
Three Months Ended September 30, 2022
Interest rate contracts	Interest income/(expense)	$	(532)	Fixed-rate debt	Interest income/(expense)	$	638
Interest rate contracts	Interest income/(expense)	47,963		Fixed-rate investment securities	Interest income/(expense)	(47,975)
Total		$	47,431			$	(47,337)
Nine Months Ended September 30, 2023
Interest rate contracts	Interest income/(expense)	$	(18,500)	Fixed-rate debt	Interest income/(expense)	$	18,303
Interest rate contracts	Interest income/(expense)	7,268		Fixed-rate investment securities	Interest income/(expense)	(7,671)
Total		$	(11,232)			$	10,632
Nine Months Ended September 30, 2022
Interest rate contracts	Interest income/(expense)	$	(7,889)	Fixed-rate debt	Interest income/(expense)	$	8,193
Interest rate contracts	Interest income/(expense)	159,397		Fixed-rate investment securities	Interest income/(expense)	(159,767)
Total		$	151,508			$	(151,574)

The effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income were as follows:

		Three Months Ended September 30,				Three Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss) Reclassified from AOCI into Income	Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Gain (Loss) Reclassified from AOCI into Income
Interest rate contracts	Interest income/(expense)	$	(15,574)	$	(36,755)	$	(5,960)	$	(749)
		Nine Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss) Reclassified from AOCI into Income	Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Gain (Loss) Reclassified from AOCI into Income
Interest rate contracts	Interest income/(expense)	$	4,302	$	(49,679)	$	17,481	$	139

Amounts reported in AOCI related to cash flow hedges will be reclassified to interest income or interest expense as interest payments are received or paid on Old National’s derivative instruments.  During the next 12 months, we estimate that $5.8 million will be reclassified to interest income and $26.3 million will be reclassified to interest expense.

Derivatives Not Designated as Hedges

Commitments to fund certain mortgage loans (interest rate lock commitments) and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives.  These derivative contracts do not qualify for hedge accounting.  At September 30, 2023, the notional amounts of the interest rate lock commitments were $42.5 million and forward commitments were $54.7 million.  At December 31, 2022, the notional amounts of the interest rate lock commitments were $21.4 million and forward commitments were $30.3 million.  It is our practice to enter into forward commitments for the future delivery of residential mortgage loans to third party investors when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from our commitment to fund the loans.

Old National also enters into derivative instruments for the benefit of its clients. The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $5.8 billion at September 30, 2023 and $5.2 billion at December 31, 2022. These derivative contracts do not qualify for hedge accounting.  These instruments include interest rate swaps, caps, and collars.  Commonly, Old National will economically hedge significant exposures related to these derivative contracts entered into for the benefit of clients by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms.

Old National enters into derivative financial instruments as part of its foreign currency risk management strategies.  These derivative instruments consist of foreign currency forward contracts to accommodate the business needs of its clients.  Old National does not designate these foreign currency forward contracts for hedge accounting treatment.

The following table summarizes Old National’s derivatives not designated as hedges:

	September 30, 2023						December 31, 2022
			Fair Value						Fair Value
(dollars in thousands)	Notional		Assets (1)		Liabilities (2)		Notional		Assets (1)		Liabilities (2)
Interest rate lock commitments	$	42,492	$	—	$	146	$	21,401	$	93	$	—
Forward mortgage loan contracts	54,730		1,031		—		30,330		32		—
Customer interest rate swaps	5,775,638		1,208		379,864		5,220,363		5,676		326,924
Counterparty interest rate swaps (3)	5,775,634		222,907		1,213		5,220,363		151,111		5,711
Customer foreign currency contracts	13,234		218		156		8,341		253		42
Counterparty foreign currency contracts	12,970		255		141		8,297		72		168
Total			$	225,619	$	381,520			$	157,237	$	332,845

(1)Derivative assets are included in other assets on the balance sheet.

(2)Derivative liabilities are included in other liabilities on the balance sheet.

(3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally cleared variation margin rules.

The effect of derivatives not designated as hedging instruments on the consolidated statements of income were as follows:

		Three Months Ended September 30,
(dollars in thousands)		2023		2022
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative
Interest rate contracts (1)	Other income/(expense)	$	426	$	108
Mortgage contracts	Mortgage banking revenue	391		638
Foreign currency contracts	Other income/(expense)	(3)		75
Total		$	814	$	821
		Nine Months Ended September 30,
		2023		2022
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative
Interest rate contracts (1)	Other income/(expense)	$	1,125	$	1,058
Mortgage contracts	Mortgage banking revenue	760		(735)
Foreign currency contracts	Other income/(expense)	(16)		113
Total		$	1,869	$	436

(1)Includes the valuation differences between the customer and offsetting swaps.

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Commitments, Contingencies, and Financial Guarantees

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies, and Financial Guarantees

COMMITMENTS, CONTINGENCIES, AND FINANCIAL GUARANTEES

Litigation

At September 30, 2023, there were certain legal proceedings pending against the Company and its subsidiaries in the ordinary course of business. While the outcome of any legal proceeding is inherently uncertain, based on information currently available, the Company’s management does not expect that any potential liabilities arising from pending legal matters will have a material adverse effect on the Company’s business, financial position, or results of operations.

Credit-Related Financial Instruments

Old National holds instruments, in the normal course of business with clients, that are considered financial guarantees and are recorded at fair value.  Standby letters of credit guarantees are issued in connection with agreements made by clients to counterparties.  Standby letters of credit are contingent upon failure of the client to

perform the terms of the underlying contract.  Credit risk associated with standby letters of credit is essentially the same as that associated with extending loans to clients and is subject to normal credit policies.  The term of these standby letters of credit is typically one year or less.  These commitments are not recorded in the consolidated financial statements.  

The following table summarizes Old National Bank’s unfunded loan commitments and standby letters of credit:

(dollars in thousands)	September 30, 2023		December 31, 2022
Unfunded loan commitments	$	9,142,538	$	8,979,334
Standby letters of credit (1)	184,027		174,070

(1)Notional amount, which represents the maximum amount of future funding requirements. The carrying value was $1.2 million at September 30, 2023 and $0.8 million at December 31, 2022.

At September 30, 2023, approximately 4% of the unfunded loan commitments had fixed rates, with the remainder having floating rates ranging from 0% to 23%.  The allowance for unfunded loan commitments totaled $33.0 million at September 30, 2023 and $32.2 million at December 31, 2022.

Old National is a party in risk participation transactions of interest rate swaps, which had total notional amounts of $522.5 million at September 30, 2023 and $398.9 million at December 31, 2022.

Visa Class B Restricted Shares

In 2008, Old National received Visa Class B restricted shares as part of Visa’s initial public offering.  These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares.  This conversion will not occur until the final settlement of certain litigation for which Visa is indemnified by the holders of Visa’s Class B shares, including Old National.  Visa funded an escrow account from its initial public offering to settle these litigation claims.  Increases in litigation claims requiring Visa to fund the escrow account due to insufficient funds will result in a reduction of the conversion ratio of each Visa Class B share to unrestricted Class A shares.  As of September 30, 2023, the conversion ratio was 1.5875.  Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation, the 65,466 Class B shares that Old National owns at September 30, 2023 are carried at a zero cost basis and are included in other assets with our equity securities that have no readily determinable fair value.

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Fair Value

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

•Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Old National used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment securities and equity securities: The fair values for investment securities and equity securities are determined by quoted market prices, if available (Level 1).  For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).  For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).  Discounted cash flows are calculated using swap and SOFR curves plus spreads that adjust for loss severities, volatility, credit risk, and optionality.  During times when trading is more liquid, broker quotes are used (if available) to validate the model.  Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Loans held-for-sale: The fair value of loans held-for-sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2).

Derivative financial instruments: The fair values of derivative financial instruments are based on market quotes developed using observable inputs as of the valuation date (Level 2).

Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which we have elected the fair value option, are summarized below: 

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Equity securities	$	69,880	$	69,880	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury	548,126		548,126		—		—
U.S. government-sponsored entities and agencies	1,142,900		—		1,142,900		—
Mortgage-backed securities - Agency	3,862,705		—		3,862,705		—
States and political subdivisions	544,944		—		544,944		—
Pooled trust preferred securities	11,125		—		11,125		—
Other securities	304,961		—		304,961		—
Loans held-for-sale	122,033		—		122,033		—
Derivative assets	227,833		—		227,833		—
Financial Liabilities
Derivative liabilities	409,269		—		409,269		—

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Equity securities	$	52,507	$	52,507	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury	200,927		200,927		—		—
U.S. government-sponsored entities and agencies	1,175,080		—		1,175,080		—
Mortgage-backed securities - Agency	4,369,902		—		4,369,902		—
States and political subdivisions	663,852		—		663,852		—
Pooled trust preferred securities	10,811		—		10,811		—
Other securities	353,140		—		353,140		—
Loans held-for-sale	11,926		—		11,926		—
Derivative assets	169,001		—		169,001		—
Financial Liabilities
Derivative liabilities	380,704		—		380,704		—

Non-Recurring Basis

Assets measured at fair value at September 30, 2023 on a non-recurring basis are summarized below:

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral Dependent Loans:
Commercial loans	$	10,783	$	—	$	—	$	10,783
Commercial real estate loans	75,720		—		—		75,720
Foreclosed Assets:
Commercial	1,879		—		—		1,879

Commercial and commercial real estate loans that are deemed collateral dependent are valued using the discounted cash flows.  The liquidation amounts are based on the fair value of the underlying collateral using the most recently available appraisals with certain adjustments made based on the type of property, age of appraisal, current status of the property, and other related factors to estimate the current value of the collateral.  These commercial and commercial real estate loans had a principal amount of $117.5 million, with a valuation allowance of $31.0 million at September 30, 2023.  Old National recorded provision expense associated with these loans totaling $2.1 million and $21.9 million for the three and nine months ended September 30, 2023, respectively.  Old National recorded provision expense associated with commercial and commercial real estate loans that were deemed collateral dependent totaling $7.3 million and $20.1 million for the three and nine months ended September 30, 2022, respectively.

Other real estate owned and other repossessed property is measured at fair value less costs to sell on a non-recurring basis and had a net carrying amount of $1.9 million at September 30, 2023. There were $26 thousand of write-downs on other real estate owned for the three months ended September 30, 2023 and $0.1 million for nine months ended September 30, 2023. There were write-downs totaling $0.2 million and $0.6 million for the three and nine months ended September 30, 2022, respectively.

Loan servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount.  If the carrying amount of an individual tranche exceeds fair value, impairment is recorded on that tranche so that the servicing asset is carried at fair value.  Fair value is determined at a tranche level, based on market prices for comparable mortgage servicing contracts when available, or alternatively based on a valuation model that calculates the present value of estimated future net servicing income.  The valuation model utilizes a discount rate, weighted average prepayment speed, and other economic factors that market participants would use in estimating future net servicing income and that can be validated against available market data (Level 2).  There was no valuation allowance for loan servicing rights with impairments at September 30, 2023 and no impairments or recoveries recorded during the three or nine months ended September 30, 2023. Old National recorded immaterial recoveries associated with loan servicing rights during the three and nine months ended September 30, 2022.

Assets measured at fair value at December 31, 2022 on a non-recurring basis are summarized below:

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral Dependent Loans:
Commercial loans	$	22,562	$	—	$	—	$	22,562
Commercial real estate loans	48,026		—		—		48,026

At December 31, 2022, commercial and commercial real estate loans that are deemed collateral dependent had a principal amount of $92.0 million, with a valuation allowance of $21.5 million.

The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:

(dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Input	Range (Weighted Average) (1)
September 30, 2023
Collateral Dependent Loans
Commercial loans	$	10,783	Discounted	Discount for type of property,	10% - 40% (33%)
			cash flow	age of appraisal, and current status
Commercial real estate loans	75,720		Discounted	Discount for type of property,	1% - 38% (17%)
			cash flow	age of appraisal, and current status
Foreclosed Assets
Commercial real estate	1,879		Fair value of	Discount for type of property,	4% - 17% (6%)
			collateral	age of appraisal, and current status
December 31, 2022
Collateral Dependent Loans
Commercial loans	$	22,562	Discounted	Discount for type of property,	10% - 47% (28%)
			cash flow	age of appraisal, and current status
Commercial real estate loans	48,026		Discounted	Discount for type of property,	1% - 26% (11%)
			cash flow	age of appraisal, and current status

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

Fair Value Option

Old National may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis with changes in fair value reported in net income.  After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability, or firm commitment or when certain specified reconsideration events occur.  The fair value election may not be revoked once an election is made.

Loans Held-For-Sale

Old National has elected the fair value option for loans held-for-sale.  For these loans, interest income is recorded in the consolidated statements of income based on the contractual amount of interest income earned on the financial assets (except any that are on nonaccrual status).  None of these loans are 90 days or more past due, nor are any on nonaccrual status.  Interest income for loans held-for-sale is included in the income statement totaling $0.4 million and $0.9 million for the three and nine months ended September 30, 2023, respectively, compared to $0.4 million and $1.6 million for the three and nine months ended September 30, 2022, respectively.

Newly originated conforming fixed-rate and adjustable-rate first mortgage loans are intended for sale and are hedged with derivative instruments.  Old National has elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification.  The fair value option was not elected for loans held for investment.

The difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was as follows: 

(dollars in thousands)	Aggregate Fair Value		Difference		Contractual Principal
September 30, 2023
Loans held-for-sale	$	122,033	$	72	$	121,961
December 31, 2022
Loans held-for-sale	$	11,926	$	221	$	11,705

Accrued interest at period end is included in the fair value of the instruments.

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:

(dollars in thousands)	Other Gains and (Losses)		Interest Income		Interest (Expense)		Total Changes in Fair Values Included in Current Period Earnings
Three Months Ended September 30, 2023
Loans held-for-sale	$	(327)	$	12	$	—	$	(315)
Three Months Ended September 30, 2022
Loans held-for-sale	$	(710)	$	1	$	—	$	(709)
Nine Months Ended September 30, 2023
Loans held-for-sale	$	(151)	$	2	$	—	$	(149)
Nine Months Ended September 30, 2022
Loans held-for-sale	$	(1,775)	$	7	$	—	$	(1,768)

Financial Instruments Not Carried at Fair Value

The carrying amounts and estimated exit price fair values of financial instruments not carried at fair value were as follows: 

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Cash, due from banks, money market,    and other interest-earning investments	$	1,663,430	$	1,663,430	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies	824,223		—		617,010		—
Mortgage-backed securities - Agency	1,043,585		—		847,652		—
State and political subdivisions	1,160,106		—		928,959		—
Loans, net:
Commercial	9,207,028		—		—		9,078,129
Commercial real estate	13,770,202		—		—		13,302,502
Residential real estate	6,675,508		—		—		5,630,855
Consumer credit	2,621,114		—		—		2,526,277
Accrued interest receivable	209,503		1,093		45,597		162,813
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	10,091,352	$	10,091,352	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits	21,585,620		21,585,620		—		—
Time deposits	5,575,704		—		5,527,361		—
Federal funds purchased and interbank borrowings	918		918		—		—
Securities sold under agreements to repurchase	279,061		279,061		—		—
FHLB advances	4,412,576		—		4,167,911		—
Other borrowings	863,455		—		843,629		—
Accrued interest payable	46,934		—		46,934		—
Standby letters of credit	1,224		—		—		1,224
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,582

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Cash, due from banks, money market,    and other interest-earning investments	$	728,412	$	728,412	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies	819,168		—		656,358		—
Mortgage-backed securities - Agency	1,106,817		—		982,963		—
State and political subdivisions	1,163,162		—		1,004,361		—
Loans, net:
Commercial	9,386,862		—		—		9,066,583
Commercial real estate	12,317,825		—		—		11,867,851
Residential real estate	6,438,525		—		—		5,372,491
Consumer credit	2,676,758		—		—		2,557,115
Accrued interest receivable	190,521		758		52,081		137,682
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	11,930,798	$	11,930,798	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits	20,056,252		20,056,252		—		—
Time deposits	3,013,780		—		2,976,389		—
Federal funds purchased and interbank borrowings	581,489		581,489		—		—
Securities sold under agreements to repurchase	432,804		432,804		—		—
FHLB advances	3,829,018		—		3,739,780		—
Other borrowings	743,003		—		703,156		—
Accrued interest payable	19,547		—		19,547		—
Standby letters of credit	755		—		—		755
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,666

The methods utilized to measure the fair value of financial instruments at September 30, 2023 and December 31, 2022 represent an approximation of exit price, however, an actual exit price may differ.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income (loss)	$ 147,876	$ 155,036	$ 146,600	$ 140,153	$ 114,985	$ (27,586)	$ 449,512	$ 227,552

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Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned subsidiaries (hereinafter collectively referred to as “Old National”) and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry.  Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of September 30, 2023 and December 31, 2022, and the results of its operations for the three and nine months ended September 30, 2023 and 2022.   Interim results do not necessarily represent annual results. Certain information and disclosures normally included in notes to consolidated annual financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to SEC rules and regulations. These financial statements should be read in conjunction with Old National’s Annual Report on Form 10-K for the year ended December 31, 2022.

All intercompany transactions and balances have been eliminated.  Certain prior year amounts have been reclassified to conform to the current presentation.  Such reclassifications had no effect on prior period net income or shareholders’ equity and were insignificant amounts.

Financial Difficulty Modifications

Financial Difficulty Modifications

Any loans that are modified are reviewed by Old National to identify if a financial difficulty modification has occurred, which is when Old National Bank modifies a loan related to a borrower experiencing financial difficulties. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan, an extension of the maturity date, a permanent reduction of the recorded investment of the loan, or an other-than-insignificant payment delay. The adoption of ASU 2022-02 on January 1, 2023 eliminated the recognition and measurement of TDRs and enhanced disclosures for modifications to loans related to borrowers experiencing financial difficulties. See Note 2 to the consolidated financial statements for additional detail regarding the adoption of ASU 2022-02.

Other than the changes for financial difficulty modifications, there have been no material changes from the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Guidance Adopted in 2023

FASB ASC 805 – In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, to address diversity in practice and inconsistency related to the accounting for revenue contracts with customers acquired in a business combination. The amendments require that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Entities should apply the amendments prospectively to business combinations that occur after the effective date. The adoption of this guidance on January 1, 2023 did not have a material impact on the consolidated financial statements.

FASB ASC 815 – In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method and rename the last-of-layer method the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15,

2022, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2023 did not have a material impact on the consolidated financial statements.

FASB ASC 326 – In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, to eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The amendments require that an entity disclose current-period gross charge-offs by year of origination for financing receivables and net investment in leases within the vintage disclosures required by ASC 326. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Old National adopted the provision in ASU 2022-02 related to the recognition and measurement of TDRs on a prospective basis on January 1, 2023, which did not have a material impact on the consolidated financial statements.

FASB ASC 848 – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from LIBOR or other interbank offered rate on financial reporting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date of relief provisions within Topic 848 from December 31, 2022 to December 31, 2024. The objective of the guidance in Topic 848 is to provide relief during the transition period.

The amendments in this ASU are effective March 12, 2020 through December 31, 2024. Old National believes the adoption of this guidance on activities subsequent to September 30, 2023 will not have a material impact on the consolidated financial statements.

Accounting Guidance Pending Adoption 

FASB ASC 820 – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

FASB ASC 842 – In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements, which requires all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. Transition can be done either retrospectively or prospectively. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

FASB ASC 323 – In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

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Net Income Per Common Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Summary of Table Reconciling Basic and Diluted Net Income Per Share

The following table presents the calculation of basic and diluted net income per common share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2023		2022		2023		2022
Net income	$	147,876	$	140,153	$	449,512	$	227,552
Preferred dividends	(4,034)		(4,034)		(12,101)		(10,084)
Net income applicable to common shares	$	143,842	$	136,119	$	437,411	$	217,468
Weighted average common shares outstanding:
Weighted average common shares outstanding (basic)	290,648		290,961		290,763		269,843
Effect of dilutive securities:
Restricted stock	1,069		1,516		1,045		1,273
Stock appreciation rights	—		6		1		7
Weighted average diluted shares outstanding	291,717		292,483		291,809		271,123
Basic Net Income Per Common Share	$	0.49	$	0.47	$	1.50	$	0.81
Diluted Net Income Per Common Share	$	0.49	$	0.47	$	1.50	$	0.80

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Amortized Cost and Fair Value of Available-for-Sale Investment Securities Portfolio

The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolios and the corresponding amounts of gross unrealized gains, unrealized losses, and basis adjustments in AOCI and gross unrecognized gains and losses.

(dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Basis Adjustments (1)		Fair Value
September 30, 2023
Available-for-Sale
U.S. Treasury	$	616,608	$	98	$	(10,258)	$	(58,322)	$	548,126
U.S. government-sponsored entities and agencies	1,475,307		—		(229,113)		(103,294)		1,142,900
Mortgage-backed securities - Agency	4,686,448		17		(823,760)		—		3,862,705
States and political subdivisions	592,495		7		(47,058)		(500)		544,944
Pooled trust preferred securities	13,794		—		(2,669)		—		11,125
Other securities	335,292		112		(30,443)		—		304,961
Total available-for-sale securities	$	7,719,944	$	234	$	(1,143,301)	$	(162,116)	$	6,414,761
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	824,223	$	—	$	(207,213)	$	—	$	617,010
Mortgage-backed securities - Agency	1,043,585		—		(195,933)		—		847,652
States and political subdivisions	1,160,256		—		(231,147)		—		929,109
Allowance for securities held-to-maturity	(150)		—		—		—		(150)
Total held-to-maturity securities	$	3,027,914	$	—	$	(634,293)	$	—	$	2,393,621
December 31, 2022
Available-for-Sale
U.S. Treasury	$	253,148	$	5	$	(5,189)	$	(47,037)	$	200,927
U.S. government-sponsored entities and agencies	1,451,736		—		(169,248)		(107,408)		1,175,080
Mortgage-backed securities - Agency	4,986,354		976		(617,428)		—		4,369,902
States and political subdivisions	688,159		1,789		(26,096)		—		663,852
Pooled trust preferred securities	13,783		—		(2,972)		—		10,811
Other securities	379,423		258		(26,541)		—		353,140
Total available-for-sale securities	$	7,772,603	$	3,028	$	(847,474)	$	(154,445)	$	6,773,712
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	819,168	$	—	$	(162,810)	$	—	$	656,358
Mortgage-backed securities - Agency	1,106,817		—		(123,854)		—		982,963
States and political subdivisions	1,163,312		221		(159,022)		—		1,004,511
Allowance for securities held-to-maturity	(150)		—		—		—		(150)
Total held-to-maturity securities	$	3,089,147	$	221	$	(445,686)	$	—	$	2,643,682

(1)    Basis adjustments represent the cumulative amount of fair value hedging adjustments included in the carrying amounts of fixed-rate investment securities assets designated in fair value hedging arrangements. See Note 15 to the consolidated financial statements for additional information regarding these derivative financial instruments.

Schedule of Proceeds from Sales or Calls and Realized Gain and Losses of Available-for-Sale Investment Securities and Other Securities

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 September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Proceeds	$	28,531	$	5,221	$	111,419	$	78,568
Realized gains	54		17		1,002		528
Realized losses	(295)		(189)		(6,442)		(443)

Expected Maturities of Investment Securities Portfolio

Weighted average yield is based on amortized cost.

	September 30, 2023
(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield
Maturity
Available-for-Sale
Within one year	$	539,157	$	535,193	4.71	%
One to five years	1,567,565		1,395,867		2.80
Five to ten years	3,987,461		3,285,183		2.37
Beyond ten years	1,625,761		1,198,518		2.46
Total	$	7,719,944	$	6,414,761	2.64	%
Held-to-Maturity
One to five years	$	161,837	$	127,716	2.68	%
Five to ten years	954,756		797,284		2.64
Beyond ten years	1,911,321		1,468,621		2.71
Total	$	3,027,914	$	2,393,621	2.69	%

Available-for-Sale and Held-to-Maturity Investment Securities with Unrealized Losses by Aggregated Major Security Type and Length of Time in Continuous Unrealized Loss Position

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 months				12 months or longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2023
Available-for-Sale
U.S. Treasury	$	37,492	$	(144)	$	178,540	$	(10,114)	$	216,032	$	(10,258)
U.S. government-sponsored entities    and agencies	32,821		(58)		1,110,079		(229,055)		1,142,900		(229,113)
Mortgage-backed securities - Agency	124,895		(5,798)		3,736,306		(817,962)		3,861,201		(823,760)
States and political subdivisions	258,362		(7,749)		260,563		(39,309)		518,925		(47,058)
Pooled trust preferred securities	—		—		11,125		(2,669)		11,125		(2,669)
Other securities	11,737		(323)		262,912		(30,120)		274,649		(30,443)
Total available-for-sale	$	465,307	$	(14,072)	$	5,559,525	$	(1,129,229)	$	6,024,832	$	(1,143,301)
December 31, 2022
Available-for-Sale
U.S. Treasury	$	130,967	$	(3,264)	$	66,992	$	(1,925)	$	197,959	$	(5,189)
U.S. government-sponsored entities    and agencies	454,854		(75,795)		720,226		(93,453)		1,175,080		(169,248)
Mortgage-backed securities - Agency	3,207,319		(358,507)		1,116,205		(258,921)		4,323,524		(617,428)
States and political subdivisions	414,813		(25,555)		2,703		(541)		417,516		(26,096)
Pooled trust preferred securities	—		—		10,811		(2,972)		10,811		(2,972)
Other securities	257,775		(17,045)		75,309		(9,496)		333,084		(26,541)
Total available-for-sale	$	4,465,728	$	(480,166)	$	1,992,246	$	(367,308)	$	6,457,974	$	(847,474)

Schedule of Held-to-Maturity Investment Securities with Unrecognized Losses

The following table summarizes the held-to-maturity investment securities with unrecognized losses aggregated by major security type and length of time in a continuous loss position:

	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
September 30, 2023
Held-to-Maturity
U.S. government-sponsored entities    and agencies	$	—	$	—	$	617,010	$	(207,213)	$	617,010	$	(207,213)
Mortgage-backed securities - Agency	—		—		847,652		(195,933)		847,652		(195,933)
States and political subdivisions	64,441		(4,877)		864,668		(226,270)		929,109		(231,147)
Total held-to-maturity	$	64,441	$	(4,877)	$	2,329,330	$	(629,416)	$	2,393,771	$	(634,293)
December 31, 2022
Held-to-Maturity
U.S. government-sponsored entities    and agencies	$	354,293	$	(110,523)	$	302,066	$	(52,287)	$	656,359	$	(162,810)
Mortgage-backed securities - Agency	367,849		(42,438)		615,114		(81,416)		982,963		(123,854)
States and political subdivisions	838,689		(127,355)		135,573		(31,667)		974,262		(159,022)
Total held-to-maturity	$	1,560,831	$	(280,316)	$	1,052,753	$	(165,370)	$	2,613,584	$	(445,686)

XML

Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Schedule of Composition of Loans and Impact of Adoption

The portfolio segment reclassifications follow:

	Balance Sheet Line Item		Portfolio Segment Reclassifications		After Reclassifications
(dollars in thousands)
September 30, 2023
Loans:
Commercial	$	9,333,448	$	(226,353)	$	9,107,095
Commercial real estate	13,916,221		(165,593)		13,750,628
BBCC	N/A		391,946		391,946
Residential real estate	6,696,288		—		6,696,288
Consumer	2,631,877		(2,631,877)		N/A
Indirect	N/A		1,047,224		1,047,224
Direct	N/A		542,689		542,689
Home equity	N/A		1,041,964		1,041,964
Total	$	32,577,834	$	—	$	32,577,834
December 31, 2022
Loans:
Commercial	$	9,508,904	$	(210,280)	$	9,298,624
Commercial real estate	12,457,070		(158,322)		12,298,748
BBCC	N/A		368,602		368,602
Residential real estate	6,460,441		—		6,460,441
Consumer	2,697,226		(2,697,226)		N/A
Indirect	N/A		1,034,257		1,034,257
Direct	N/A		629,186		629,186
Home equity	N/A		1,033,783		1,033,783
Total	$	31,123,641	$	—	$	31,123,641

Schedule of Composition of Loans

The composition of loans by portfolio segment follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Commercial (1)	$	9,107,095	$	9,298,624
Commercial real estate	13,750,628		12,298,748
BBCC	391,946		368,602
Residential real estate	6,696,288		6,460,441
Indirect	1,047,224		1,034,257
Direct	542,689		629,186
Home equity	1,041,964		1,033,783
Total loans	32,577,834		31,123,641
Allowance for credit losses on loans	(303,982)		(303,671)
Net loans	$	32,273,852	$	30,819,970

(1)Includes direct finance leases of $173.0 million at September 30, 2023 and $188.1 million at December 31, 2022.

Schedule of Activity in Allowance for Loan Losses

Old National’s activity in the allowance for credit losses on loans by portfolio segment was as follows:

(dollars in thousands)	Balance at Beginning of Period		Allowance Established for Acquired PCD Loans		Charge-offs		Recoveries		Provision for Loan Losses		Balance at End of Period
Three Months Ended September 30, 2023
Commercial	$	127,403	$	—	$	(16,705)	$	1,616	$	12,441	$	124,755
Commercial real estate	136,897		—		(2,291)		102		10,267		144,975
BBCC	2,776		—		(1,049)		70		912		2,709
Residential real estate	20,421		—		(15)		28		346		20,780
Indirect	1,407		—		(490)		325		79		1,321
Direct	4,755		—		(2,180)		580		416		3,571
Home equity	6,896		—		(20)		341		(1,346)		5,871
Total	$	300,555	$	—	$	(22,750)	$	3,062	$	23,115	$	303,982
Three Months Ended September 30, 2022
Commercial	$	102,819	$	3,740	$	(2,696)	$	2,206	$	6,344	$	112,413
Commercial real estate	141,802		6,818		(4,772)		287		(45)		144,090
BBCC	2,064		—		—		108		(4)		2,168
Residential real estate	19,729		—		(20)		66		1,481		21,256
Indirect	1,641		—		(624)		379		189		1,585
Direct	14,412		—		(3,299)		442		4,541		16,096
Home equity	5,536		—		(29)		357		(1,218)		4,646
Total	$	288,003	$	10,558	$	(11,440)	$	3,845	$	11,288	$	302,254
Nine Months Ended September 30, 2023
Commercial	$	120,612	$	—	$	(37,459)	$	3,713	$	37,889	$	124,755
Commercial real estate	138,244		—		(5,938)		1,394		11,275		144,975
BBCC	2,431		—		(1,171)		174		1,275		2,709
Residential real estate	21,916		—		(256)		153		(1,033)		20,780
Indirect	1,532		—		(2,089)		1,349		529		1,321
Direct	12,116		—		(8,018)		1,798		(2,325)		3,571
Home equity	6,820		—		(330)		471		(1,090)		5,871
Total	$	303,671	$	—	$	(55,261)	$	9,052	$	46,520	$	303,982
Nine Months Ended September 30, 2022
Commercial	$	27,232	$	38,780	$	(5,919)	$	3,219	$	49,101	$	112,413
Commercial real estate	64,004		49,419		(5,596)		789		35,474		144,090
BBCC	2,458		—		(48)		256		(498)		2,168
Residential real estate	9,347		136		(344)		636		11,481		21,256
Indirect	1,743		—		(1,636)		921		557		1,585
Direct	528		31		(6,550)		1,712		20,375		16,096
Home equity	2,029		723		(107)		540		1,461		4,646
Total	$	107,341	$	89,089	$	(20,200)	$	8,073	$	117,951	$	302,254

Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Allowance for credit losses on unfunded loan commitments:
Balance at beginning of period	$	37,007	$	21,966	$	32,188	$	10,879
Provision for credit losses on unfunded loan commitments    acquired during the period	—		—		—		11,013
(Recapture of) provision for credit losses on unfunded loan    commitments	(4,047)		4,203		772		4,277
Balance at end of period	$	32,960	$	26,169	$	32,960	$	26,169

Schedule of Risk Category of Loans and Amortized Cost

The following table summarizes the amortized cost of term loans by risk category of commercial, commercial real estate, and BBCC loans by loan portfolio segment, class of loan, and origination year:

(dollars in thousands)	Origination Year														Revolving to Term
	2023		2022		2021		2020		2019		Prior		Revolving				Total
September 30, 2023
Commercial:
Pass	$	1,615,716	$	1,690,168	$	1,095,758	$	553,187	$	479,907	$	501,610	$	2,000,147	$	454,995	$	8,391,488
Criticized	27,469		110,893		21,107		46,241		22,674		54,738		107,105		32,247		422,474
Classified:
Substandard	19,509		40,694		32,135		38,892		9,970		20,431		66,977		15,417		244,025
Nonaccrual	—		5,748		2,034		284		2,718		—		—		—		10,784
Doubtful	—		18,838		5,626		1,762		962		11,136		—		—		38,324
Total	$	1,662,694	$	1,866,341	$	1,156,660	$	640,366	$	516,231	$	587,915	$	2,174,229	$	502,659	$	9,107,095
Commercial real estate:
Pass	$	1,805,852	$	3,432,536	$	2,715,562	$	1,734,359	$	1,117,895	$	1,273,742	$	73,590	$	796,442	$	12,949,978
Criticized	58,440		62,461		42,128		28,716		27,978		90,549		9,959		21,023		341,254
Classified:
Substandard	21,214		84,269		23,589		16,822		78,165		41,313		—		50,424		315,796
Nonaccrual	—		2,983		11,470		1,428		52		11,385		—		792		28,110
Doubtful	—		1,649		33,564		4,142		38,199		37,936		—		—		115,490
Total	$	1,885,506	$	3,583,898	$	2,826,313	$	1,785,467	$	1,262,289	$	1,454,925	$	83,549	$	868,681	$	13,750,628
BBCC:
Pass	$	74,658	$	76,281	$	49,463	$	42,980	$	30,085	$	14,488	$	66,281	$	18,582	$	372,818
Criticized	2,295		2,469		1,114		76		1,110		—		2,470		2,264		11,798
Classified:
Substandard	98		733		619		24		401		1,196		100		438		3,609
Nonaccrual	216		451		310		340		—		87		477		278		2,159
Doubtful	—		865		492		50		67		88		—		—		1,562
Total	$	77,267	$	80,799	$	51,998	$	43,470	$	31,663	$	15,859	$	69,328	$	21,562	$	391,946

(dollars in thousands)	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Commercial:
Pass	$	2,388,618	$	1,754,364	$	796,340	$	738,208	$	362,986	$	388,617	$	1,988,763	$	329,119	$	8,747,015
Criticized	40,856		30,661		63,557		33,490		9,195		5,312		61,036		4,327		248,434
Classified:
Substandard	37,223		47,522		16,540		22,925		4,844		21,204		67,402		25,143		242,803
Nonaccrual	3,627		1,453		566		—		—		—		1,634		6,623		13,903
Doubtful	2,821		17,604		3,720		8,005		5,968		8,351		—		—		46,469
Total	$	2,473,145	$	1,851,604	$	880,723	$	802,628	$	382,993	$	423,484	$	2,118,835	$	365,212	$	9,298,624
Commercial real estate:
Pass	$	3,066,960	$	2,828,758	$	1,989,000	$	1,219,025	$	675,572	$	1,018,719	$	57,818	$	689,553	$	11,545,405
Criticized	75,306		34,422		22,569		82,637		86,504		56,864		—		23,282		381,584
Classified:
Substandard	46,231		16,928		24,319		78,468		57,824		21,591		—		4,108		249,469
Nonaccrual	3,151		9,541		5,014		—		2,312		22,155		—		3,257		45,430
Doubtful	1,934		38,386		10,011		4,605		1,523		20,401		—		—		76,860
Total	$	3,193,582	$	2,928,035	$	2,050,913	$	1,384,735	$	823,735	$	1,139,730	$	57,818	$	720,200	$	12,298,748
BBCC:
Pass	$	90,341	$	64,161	$	52,304	$	36,868	$	23,618	$	11,333	$	60,016	$	18,881	$	357,522
Criticized	1,504		525		368		692		353		—		1,006		1,603		6,051
Classified:
Substandard	811		143		—		421		—		—		543		682		2,600
Nonaccrual	42		37		118		—		429		284		—		639		1,549
Doubtful	40		107		439		157		64		73		—		—		880
Total	$	92,738	$	64,973	$	53,229	$	38,138	$	24,464	$	11,690	$	61,565	$	21,805	$	368,602

The following table presents the amortized cost of term residential real estate and consumer loans based on payment activity and origination year:

	Origination Year														Revolving to Term
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving				Total
September 30, 2023
Residential real estate:
Risk Rating:
Performing	$	362,518	$	1,504,933	$	1,861,729	$	1,732,039	$	444,411	$	750,037	$	—	$	279	$	6,655,946
Nonperforming	—		3,529		2,905		4,538		3,343		26,027		—		—		40,342
Total	$	362,518	$	1,508,462	$	1,864,634	$	1,736,577	$	447,754	$	776,064	$	—	$	279	$	6,696,288
Indirect:
Risk Rating:
Performing	$	309,220	$	390,012	$	181,235	$	96,148	$	46,877	$	19,666	$	—	$	196	$	1,043,354
Nonperforming	120		1,270		1,175		604		361		340		—		—		3,870
Total	$	309,340	$	391,282	$	182,410	$	96,752	$	47,238	$	20,006	$	—	$	196	$	1,047,224
Direct:
Risk Rating:
Performing	$	84,749	$	99,625	$	107,539	$	54,070	$	35,065	$	87,207	$	63,877	$	4,852	$	536,984
Nonperforming	87		486		522		403		316		3,874		6		11		5,705
Total	$	84,836	$	100,111	$	108,061	$	54,473	$	35,381	$	91,081	$	63,883	$	4,863	$	542,689
Home equity:
Risk Rating:
Performing	$	1	$	692	$	387	$	690	$	743	$	5,736	$	994,797	$	23,918	$	1,026,964
Nonperforming	—		24		219		203		758		4,810		1,692		7,294		15,000
Total	$	1	$	716	$	606	$	893	$	1,501	$	10,546	$	996,489	$	31,212	$	1,041,964

	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Residential real estate:
Risk Rating:
Performing	$	1,327,168	$	1,945,792	$	1,825,762	$	478,529	$	136,260	$	712,175	$	7	$	88	$	6,425,781
Nonperforming	59		529		861		873		1,826		30,512		—		—		34,660
Total	$	1,327,227	$	1,946,321	$	1,826,623	$	479,402	$	138,086	$	742,687	$	7	$	88	$	6,460,441
Indirect:
Risk Rating:
Performing	$	504,410	$	249,407	$	144,265	$	82,304	$	31,484	$	19,095	$	—	$	62	$	1,031,027
Nonperforming	348		1,074		645		531		304		328		—		—		3,230
Total	$	504,758	$	250,481	$	144,910	$	82,835	$	31,788	$	19,423	$	—	$	62	$	1,034,257
Direct:
Risk Rating:
Performing	$	132,934	$	164,126	$	77,406	$	57,919	$	45,299	$	59,212	$	87,622	$	671	$	625,189
Nonperforming	115		851		614		205		327		1,526		5		354		3,997
Total	$	133,049	$	164,977	$	78,020	$	58,124	$	45,626	$	60,738	$	87,627	$	1,025	$	629,186
Home equity:
Risk Rating:
Performing	$	919	$	896	$	1,849	$	1,497	$	983	$	11,646	$	990,001	$	14,792	$	1,022,583
Nonperforming	166		160		166		446		794		4,308		1,698		3,462		11,200
Total	$	1,085	$	1,056	$	2,015	$	1,943	$	1,777	$	15,954	$	991,699	$	18,254	$	1,033,783

The following table summarizes the gross charge-offs of loans by loan portfolio segment and origination year:

	Origination Year
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Three Months Ended September 30, 2023
Commercial	$	—	$	4,154	$	12,271	$	—	$	—	$	63	$	217	$	16,705
Commercial real estate	—		—		—		1,744		—		547		—		2,291
BBCC	499		501		49		—		—		—		—		1,049
Residential real estate	—		—		—		—		—		15		—		15
Indirect	75		276		86		12		10		31		—		490
Direct	19		429		423		112		270		60		867		2,180
Home equity	—		—		—		—		—		20		—		20
Total gross charge-offs	$	593	$	5,360	$	12,829	$	1,868	$	280	$	736	$	1,084	$	22,750
Nine Months Ended September 30, 2023
Commercial	$	—	$	6,254	$	23,432	$	120	$	6,789	$	302	$	562	$	37,459
Commercial real estate	—		54		735		2,144		—		3,005		—		5,938
BBCC	499		548		77		47		—		—		—		1,171
Residential real estate	—		—		—		—		—		256		—		256
Indirect	85		954		640		153		137		120		—		2,089
Direct	19		1,330		1,805		570		1,011		450		2,833		8,018
Home equity	—		—		—		—		—		330		—		330
Total gross charge-offs	$	603	$	9,140	$	26,689	$	3,034	$	7,937	$	4,463	$	3,395	$	55,261

Schedule of Past Due Financing Receivables

The following table presents the aging of the amortized cost basis in past due loans by class of loans:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Current		Total Loans
September 30, 2023
Commercial	$	2,754	$	4,214	$	12,504	$	19,472	$	9,087,623	$	9,107,095
Commercial real estate	15,954		6,295		21,366		43,615		13,707,013		13,750,628
BBCC	1,273		511		712		2,496		389,450		391,946
Residential	29,762		6,784		12,733		49,279		6,647,009		6,696,288
Indirect	5,576		1,368		1,156		8,100		1,039,124		1,047,224
Direct	3,626		1,059		1,588		6,273		536,416		542,689
Home equity	5,840		1,808		6,077		13,725		1,028,239		1,041,964
Total	$	64,785	$	22,039	$	56,136	$	142,960	$	32,434,874	$	32,577,834
December 31, 2022
Commercial	$	14,147	$	4,801	$	11,080	$	30,028	$	9,268,596	$	9,298,624
Commercial real estate	47,240		1,312		32,892		81,444		12,217,304		12,298,748
BBCC	730		365		603		1,698		366,904		368,602
Residential	24,181		5,033		11,753		40,967		6,419,474		6,460,441
Indirect	6,302		2,118		958		9,378		1,024,879		1,034,257
Direct	5,404		2,118		1,928		9,450		619,736		629,186
Home equity	6,585		1,966		4,707		13,258		1,020,525		1,033,783
Total	$	104,589	$	17,713	$	63,921	$	186,223	$	30,937,418	$	31,123,641

Schedule of Nonaccrual and Past Due Loans

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing by class of loan:

	September 30, 2023						December 31, 2022
(dollars in thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or More and Accruing		Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or More and Accruing
Commercial	$	49,108	$	13,432	$	577	$	60,372	$	7,873	$	152
Commercial real estate	143,600		29,721		104		122,290		33,445		—
BBCC	3,721		—		—		2,429		—		—
Residential	40,342		—		—		34,660		—		1,808
Indirect	3,870		—		54		3,230		—		28
Direct	5,705		—		109		3,997		—		133
Home equity	15,000		—		348		11,200		—		529
Total	$	261,346	$	43,153	$	1,192	$	238,178	$	41,318	$	2,650

The following table presents the amortized cost basis of collateral dependent loans by class of loan:

	Type of Collateral
(dollars in thousands)	Real Estate		Blanket Lien		Investment Securities/Cash		Auto		Other
September 30, 2023
Commercial	$	13,635	$	31,856	$	466	$	288	$	347
Commercial real estate	131,826		—		1,205		—		6,184
BBCC	2,131		1,174		—		416		—
Residential	40,342		—		—		—		—
Indirect	—		—		—		3,870		—
Direct	4,622		1		3		296		31
Home equity	15,000		—		—		—		—
Total loans	$	207,556	$	33,031	$	1,674	$	4,870	$	6,562
December 31, 2022
Commercial	$	8,962	$	42,754	$	2,690	$	1,611	$	980
Commercial real estate	108,871		—		1,718		—		6,411
BBCC	1,939		478		—		12		—
Residential	34,660		—		—		—		—
Indirect	—		—		—		3,230		—
Direct	2,991		13		—		232		23
Home equity	11,200		—		—		—		—
Total loans	$	168,623	$	43,245	$	4,408	$	5,085	$	7,414

Schedule of Activity in Trouble Debt Restructurings

The following table presents the amortized cost basis of financial difficulty modifications at September 30, 2023 that were modified during the three and nine months ended September 30, 2023 by class of loans and type of modification:

(dollars in thousands)	Term Extension		Total Class of Loans
Three Months Ended September 30, 2023
Commercial	$	3,502	0.0	%
Commercial real estate	93,844		0.7	%
Total	$	97,346	0.3	%
Nine Months Ended September 30, 2023
Commercial	$	20,811	0.2	%
Commercial real estate	116,580		0.8	%
Total	$	137,391	0.4	%

Old National closely monitors the performance of financial difficulty modifications to understand the effectiveness of its efforts. The following table presents the performance of loans identified as financial difficulty modifications at September 30, 2023:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Current		Total Loans
September 30, 2023
Commercial	$	—	$	—	$	2,541	$	2,541	$	18,270	$	20,811
Commercial real estate	1,086		—		—		1,086		115,494		116,580
Total	$	1,086	$	—	$	2,541	$	3,627	$	133,764	$	137,391

The following table summarizes the nature of the financial difficulty modifications during the three and nine months ended September 30, 2023 by class of loans:

(dollars in thousands)	Weighted- Average Term Extension (in months)
Three Months Ended September 30, 2023
Commercial	7.3
Commercial real estate	9.2
Total	9.2
Nine Months Ended September 30, 2023
Commercial	5.7
Commercial real estate	8.9
Total	8.4

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Components of Lease Expense

The components of lease expense were as follows:

	Affected Line Item in the Statement of Income	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Operating lease cost	Occupancy/Equipment expense	$	7,462	$	7,657	$	23,569	$	21,323
Finance lease cost:
Amortization of right-of-use assets	Occupancy expense	742		680		2,170		2,003
Interest on lease liabilities	Interest expense	183		105		536		315
Sub-lease income	Occupancy expense	(119)		(87)		(281)		(389)
Total		$	8,268	$	8,355	$	25,994	$	23,252

Schedule of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases was as follows:

(dollars in thousands)	September 30, 2023			December 31, 2022
Operating Leases
Operating lease right-of-use assets	$	179,284		$	189,714
Operating lease liabilities	199,937			211,964
Finance Leases
Premises and equipment, net	20,571			10,799
Other borrowings	21,595			13,469
Weighted-Average Remaining Lease Term (in Years)
Operating leases	8.5			9.1
Finance leases	10.6			7.2
Weighted-Average Discount Rate
Operating leases	2.93		%	2.88		%
Finance leases	3.89		%	3.30		%

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,766	$	22,223
Operating cash flows from finance leases	536		315
Financing cash flows from finance leases	1,893		1,839

Schedule of Maturity Analysis of Lease Liability by Lease Classification

The following table presents a maturity analysis of the Company’s lease liability by lease classification at September 30, 2023:

(dollars in thousands)	Operating Leases		Finance Leases
2023	$	7,959	$	826
2024	31,183		3,357
2025	29,564		3,380
2026	28,622		2,154
2027	27,662		2,157
Thereafter	102,282		14,809
Total undiscounted lease payments	227,272		26,683
Amounts representing interest	(27,335)		(5,088)
Lease liability	$	199,937	$	21,595

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill

The following table presents the changes in the carrying amount of goodwill:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Balance at beginning of period	$	1,998,716	$	1,991,534	$	1,998,716	$	1,036,994
Acquisitions and adjustments	—		11,065		—		965,605
Balance at end of period	$	1,998,716	$	2,002,599	$	1,998,716	$	2,002,599

Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets

The gross carrying amounts and accumulated amortization of other intangible assets were as follows: 

(dollars in thousands)	Gross Carrying Amount		Accumulated Amortization and Impairment		Net Carrying Amount
September 30, 2023
Core deposit	$	143,511	$	(68,312)	$	75,199
Customer trust relationships	52,621		(19,701)		32,920
Total other intangible assets	$	196,132	$	(88,013)	$	108,119
December 31, 2022
Core deposit	$	170,642	$	(80,951)	$	89,691
Customer trust relationships	56,243		(19,529)		36,714
Total other intangible assets	$	226,885	$	(100,480)	$	126,405

Schedule of Estimated Amortization Expense for Future Years

Estimated amortization expense for future years is as follows:

(dollars in thousands)
2023 remaining	$	5,869
2024	21,239
2025	18,358
2026	15,555
2027	12,867
Thereafter	34,231
Total	$	108,119

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Qualified Affordable Housing Projects and Other Tax Credit Investments (Tables)

9 Months Ended

Sep. 30, 2023

Investments in Affordable Housing Projects [Abstract]

Schedule of Qualified Affordable Housing Projects and Other Tax Credit Investments

The following table summarizes Old National’s investments in qualified affordable housing projects and other tax credit investments:

(dollars in thousands)		September 30, 2023				December 31, 2022
Investment	Accounting Method	Investment		Unfunded Commitment (1)		Investment		Unfunded Commitment
LIHTC	Proportional amortization	$	93,214	$	54,440	$	84,428	$	55,754
FHTC	Equity	36,715		27,214		19,316		9,588
NMTC	Consolidation	45,637		—		51,912		—
Renewable Energy	Equity	385		—		1,099		—
Total		$	175,951	$	81,654	$	156,755	$	65,342

(1)All commitments will be paid by Old National by December 31, 2027.

The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments:

(dollars in thousands)	Amortization Expense (1)		Tax Expense (Benefit) Recognized (2)
Three Months Ended September 30, 2023
LIHTC	$	3,208	$	(3,582)
FHTC	330		(399)
NMTC	2,092		(2,611)
Renewable Energy	222		—
Total	$	5,852	$	(6,592)
Three Months Ended September 30, 2022
LIHTC	$	1,240	$	(1,650)
FHTC	215		(262)
NMTC	2,237		(2,788)
Renewable Energy	210		—
Total	$	3,902	$	(4,700)
Nine Months Ended September 30, 2023
LIHTC	$	6,135	$	(7,398)
FHTC	1,178		(1,423)
NMTC	6,275		(7,833)
Renewable Energy	714		—
Total	$	14,302	$	(16,654)
Nine Months Ended September 30, 2022
LIHTC	$	3,734	$	(4,950)
FHTC	635		(776)
NMTC	4,439		(5,538)
Renewable Energy	629		—
Total	$	9,437	$	(11,264)

(1)The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, and Renewable Energy tax credits is included in noninterest expense.

(2)All of the tax benefits recognized are included in our income tax expense.  The tax benefit recognized for the FHTC, NMTC, and Renewable Energy investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).

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Securities Sold Under Agreements to Repurchase (Tables)

9 Months Ended

Sep. 30, 2023

Securities Sold under Agreements to Repurchase [Abstract]

Schedule of Securities Sold Under Agreements to Repurchase and Weighted-Average Interest Rates

The following table presents securities sold under agreements to repurchase and related weighted-average interest rates:

	At or for the Nine Months Ended September 30,
(dollars in thousands)	2023			2022
Outstanding at period end	$	279,061		$	438,053
Average amount outstanding during the period	351,362			450,966
Maximum amount outstanding at any month-end during the period	430,537			509,275
Weighted-average interest rate:
During the period	0.91		%	0.09		%
At period end	1.35		%	0.40		%

Schedule of Remaining Contractual Maturity of Secured Borrowings and Class of Collateral Pledged Under Repurchase Agreements

The following table presents the contractual maturity of our secured borrowings and class of collateral pledged:

	At September 30, 2023
	Remaining Contractual Maturity of the Agreements
(dollars in thousands)	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 days		Total
Repurchase Agreements:
U.S. Treasury and agency securities	$	279,061	$	—	$	—	$	—	$	279,061
Total	$	279,061	$	—	$	—	$	—	$	279,061

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Federal Home Loan Bank Advances (Tables)

9 Months Ended

Sep. 30, 2023

Federal Home Loan Banks [Abstract]

Summary of FHLB Advances

The following table summarizes Old National Bank’s FHLB advances:

(dollars in thousands)	September 30, 2023		December 31, 2022
FHLB advances (fixed rates 0.00% to 5.61%    and variable rates 5.35% to 5.36%) maturing    December 2023 to September 2042	$	4,450,528	$	3,850,677
Fair value hedge basis adjustments and unamortized    prepayment fees	(37,952)		(21,659)
Total	$	4,412,576	$	3,829,018

Summary of Contractual Maturities of FHLB Advances

Contractual maturities of FHLB advances at September 30, 2023 were as follows:

(dollars in thousands)
Due in 2023	$	100,000
Due in 2024	25,243
Due in 2025	550,285
Due in 2026	100,000
Thereafter	3,675,000
Fair value hedge basis adjustments and unamortized prepayment fees	(37,952)
Total	$	4,412,576

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Other Borrowings (Tables)

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Summary of Other Borrowings

The following table summarizes Old National’s other borrowings:

(dollars in thousands)	September 30, 2023		December 31, 2022
Old National Bancorp:
Senior unsecured notes (fixed rate 4.125%) maturing August 2024	$	175,000	$	175,000
Unamortized debt issuance costs related to senior unsecured notes	(130)		(247)
Subordinated debentures (fixed rate 5.875%) maturing September 2026	150,000		150,000
Junior subordinated debentures (rates of 6.95% to 9.21%) maturing    July 2031 to September 2037	136,643		136,643
Other basis adjustments	19,496		23,363
Old National Bank:
Finance lease liabilities	21,595		13,469
Subordinated debentures (variable rate 9.99%) maturing October 2025	12,000		12,000
Leveraged loans for NMTC (fixed rates of 1.00% to 1.43%)    maturing December 2046 to June 2060	143,745		143,187
Other (1)	205,106		89,588
Total other borrowings	$	863,455	$	743,003

(1)Includes overnight borrowings to collateralize certain derivative positions totaling $204.5 million at September 30, 2023 and $88.0 million at December 31, 2022.

The following table summarizes the terms of our outstanding junior subordinated debentures at September 30, 2023:

(dollars in thousands)					Rate at September 30, 2023
Name of Trust	Issuance Date	Issuance Amount		Rate		Maturity Date
Bridgeview Statutory Trust I	July 2001	$	15,464	3-month SOFR plus 3.58%	9.21%	July 31, 2031
Bridgeview Capital Trust II	December 2002	15,464		3-month SOFR plus 3.35%	8.92%	January 7, 2033
First Midwest Capital Trust I	November 2003	37,825		6.95% fixed	6.95%	December 1, 2033
St. Joseph Capital Trust II	March 2005	5,155		3-month SOFR plus 1.75%	7.42%	March 17, 2035
Northern States Statutory Trust I	September 2005	10,310		3-month SOFR plus 1.80%	7.47%	September 15, 2035
Anchor Capital Trust III	August 2005	5,000		3-month SOFR plus 1.55%	7.21%	September 30, 2035
Great Lakes Statutory Trust II	December 2005	6,186		3-month SOFR plus 1.40%	7.07%	December 15, 2035
Home Federal Statutory    Trust I	September 2006	15,464		3-month SOFR plus 1.65%	7.32%	September 15, 2036
Monroe Bancorp Capital    Trust I	July 2006	3,093		3-month SOFR plus 1.60%	7.17%	October 7, 2036
Tower Capital Trust 3	December 2006	9,279		3-month SOFR plus 1.69%	7.36%	March 1, 2037
Monroe Bancorp Statutory    Trust II	March 2007	5,155		3-month SOFR plus 1.60%	7.27%	June 15, 2037
Great Lakes Statutory Trust III	June 2007	8,248		3-month SOFR plus 1.70%	7.37%	September 15, 2037
Total		$	136,643

The following table summarizes Old National Bank’s unfunded loan commitments and standby letters of credit:

(dollars in thousands)	September 30, 2023		December 31, 2022
Unfunded loan commitments	$	9,142,538	$	8,979,334
Standby letters of credit (1)	184,027		174,070

(1)Notional amount, which represents the maximum amount of future funding requirements. The carrying value was $1.2 million at September 30, 2023 and $0.8 million at December 31, 2022.

Summary of Contractual Maturities of Other Borrowings

Contractual maturities of other borrowings at September 30, 2023 were as follows:

(dollars in thousands)
Due in 2023	$	205,160
Due in 2024	177,653
Due in 2025	14,740
Due in 2026	151,576
Due in 2027	1,636
Thereafter	292,738
Unamortized debt issuance costs and other basis adjustments	19,952
Total	$	863,455

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of AOCI

The following table summarizes the changes within each classification of AOCI, net of tax:

(dollars in thousands)	Unrealized Gains and Losses on Available- for-Sale Debt Securities		Unrealized Gains and Losses on Held-to- Maturity Securities		Gains and Losses on Hedges		Defined Benefit Pension Plans		Total
Three Months Ended September 30, 2023
Balance at beginning of period	$	(701,393)	$	(103,144)	$	(4,096)	$	—	$	(808,633)
Other comprehensive income (loss) before    reclassifications	(156,660)		—		(11,546)		—		(168,206)
Amounts reclassified from AOCI to income (1)	178		4,193		3,653		—		8,024
Balance at end of period	$	(857,875)	$	(98,951)	$	(11,989)	$	—	$	(968,815)
Three Months Ended September 30, 2022
Balance at beginning of period	$	(437,075)	$	(122,199)	$	(9,875)	$	16	$	(569,133)
Other comprehensive income (loss) before    reclassifications	(217,401)		—		(27,725)		—		(245,126)
Amounts reclassified from AOCI to income (1)	131		5,121		565		(8)		5,809
Balance at end of period	$	(654,345)	$	(117,078)	$	(37,035)	$	8	$	(808,450)
Nine Months Ended September 30, 2023
Balance at beginning of period	$	(642,346)	$	(112,664)	$	(31,549)	$	137	$	(786,422)
Other comprehensive income (loss) before    reclassifications	(219,562)		1,325		34,279		—		(183,958)
Amounts reclassified from AOCI to income (1)	4,033		12,388		(14,719)		(137)		1,565
Balance at end of period	$	(857,875)	$	(98,951)	$	(11,989)	$	—	$	(968,815)
Nine Months Ended September 30, 2022
Balance at beginning of period	$	(2,950)	$	—	$	543	$	32	$	(2,375)
Other comprehensive income (loss) before    reclassifications	(651,330)		(125,229)		(37,473)		—		(814,032)
Amounts reclassified from AOCI to income (1)	(65)		8,151		(105)		(24)		7,957
Balance at end of period	$	(654,345)	$	(117,078)	$	(37,035)	$	8	$	(808,450)

(1)See table below for details about reclassifications to income.

Reclassifications out of AOCI

The following table summarizes the amounts reclassified out of each component of AOCI for the three months ended September 30, 2023 and 2022:

	Three Months Ended September 30,
(dollars in thousands)	2023		2022
Details about AOCI Components	Amount Reclassified from AOCI				Affected Line Item in the Statement of Income
Unrealized gains and losses on    available-for-sale securities	$	(241)	$	(172)	Debt securities gains (losses), net
	63		41		Income tax (expense) benefit
	$	(178)	$	(131)	Net income (loss)
Unrealized gains and losses on    held-to-maturity securities	$	(5,623)	$	(6,772)	Interest income (expense)
	1,430		1,651		Income tax (expense) benefit
	$	(4,193)	$	(5,121)	Net income (loss)
Gains and losses on hedges    Interest rate contracts	$	(4,927)	$	(749)	Interest income (expense)
	1,274		184		Income tax (expense) benefit
	$	(3,653)	$	(565)	Net income (loss)
Amortization of defined benefit    pension items
Actuarial gains (losses)	$	—	$	11	Salaries and employee benefits
	—		(3)		Income tax (expense) benefit
	$	—	$	8	Net income (loss)
Total reclassifications for the period	$	(8,024)	$	(5,809)	Net income (loss)

The following table summarizes the amounts reclassified out of each component of AOCI for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Details about AOCI Components	Amount Reclassified from AOCI				Affected Line Item in the Statement of Income
Unrealized gains and losses on    available-for-sale securities	$	(5,440)	$	85	Debt securities gains (losses), net
	1,407		(20)		Income tax (expense) benefit
	$	(4,033)	$	65	Net income (loss)
Unrealized gains and losses on    held-to-maturity securities	$	(16,574)	$	(10,774)	Interest income (expense)
	4,186		2,623		Income tax (expense) benefit
	$	(12,388)	$	(8,151)	Net income (loss)
Gains and losses on hedges    Interest rate contracts	$	19,893	$	139	Interest income (expense)
	(5,174)		(34)		Income tax (expense) benefit
	$	14,719	$	105	Net income (loss)
Amortization of defined benefit    pension items
Actuarial gains (losses)	$	182	$	32	Salaries and employee benefits
	(45)		(8)		Income tax (expense) benefit
	$	137	$	24	Net income (loss)
Total reclassifications for the period	$	(1,565)	$	(7,957)	Net income (loss)

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Summary of Differences in Taxes from Continuing Operations Computed at Statutory Rate

Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2023			2022			2023			2022
Provision at statutory rate of 21%	$	40,358		$	37,598		$	122,352		$	59,365
Tax-exempt income:
Tax-exempt interest	(4,625)			(3,929)			(13,716)			(10,335)
Section 291/265 interest disallowance	675			85			1,593			150
Company-owned life insurance income	(743)			(684)			(2,315)			(2,340)
Tax-exempt income	(4,693)			(4,528)			(14,438)			(12,525)
State income taxes	8,163			7,050			24,856			7,808
Interim period effective rate adjustment	116			(31)			(607)			3,042
Tax credit investments - federal	(2,071)			(2,407)			(7,122)			(4,968)
Officer compensation limitation	1,040			401			3,120			1,053
Non-deductible FDIC premiums	1,949			1,178			6,096			2,549
Other, net	(558)			(374)			(1,139)			(1,187)
Income tax expense (benefit)	$	44,304		$	38,887		$	133,118		$	55,137
Effective tax rate	23.1		%	21.7		%	22.9		%	19.5		%

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Interest Rate Derivatives

The following table summarizes Old National’s derivatives designated as hedges:

	September 30, 2023						December 31, 2022
			Fair Value						Fair Value
(dollars in thousands)	Notional		Assets (1)		Liabilities (2)		Notional		Assets (1)		Liabilities (2)
Cash flow hedges
Interest rate collars and floors on loan pools	$	1,500,000	$	2,214	$	27,749	$	1,900,000	$	11,764	$	47,859
Interest rate swaps on borrowings (3)	150,000		—		—		150,000		—		—
Fair value hedges
Interest rate swaps on investment securities (3)	998,107		—		—		909,957		—		—
Interest rate swaps on borrowings (3)	700,000		—		—		300,000		—		—
Total			$	2,214	$	27,749			$	11,764	$	47,859

(1)Derivative assets are included in other assets on the balance sheet.

(2)Derivative liabilities are included in other liabilities on the balance sheet.

(3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally cleared variation margin rules.

Schedule of Derivative Instruments Effect on Consolidated Statement of Income

The effect of derivative instruments in fair value hedging relationships on the consolidated statements of income were as follows:

(dollars in thousands)						Gain (Loss) Recognized in Income on Related Hedged Items
Derivatives in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative		Hedged Items in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in in Income on Related Hedged Item
Three Months Ended September 30, 2023
Interest rate contracts	Interest income/(expense)	$	(9,553)	Fixed-rate debt	Interest income/(expense)	$	9,566
Interest rate contracts	Interest income/(expense)	45,537		Fixed-rate investment securities	Interest income/(expense)	(46,055)
Total		$	35,984			$	(36,489)
Three Months Ended September 30, 2022
Interest rate contracts	Interest income/(expense)	$	(532)	Fixed-rate debt	Interest income/(expense)	$	638
Interest rate contracts	Interest income/(expense)	47,963		Fixed-rate investment securities	Interest income/(expense)	(47,975)
Total		$	47,431			$	(47,337)
Nine Months Ended September 30, 2023
Interest rate contracts	Interest income/(expense)	$	(18,500)	Fixed-rate debt	Interest income/(expense)	$	18,303
Interest rate contracts	Interest income/(expense)	7,268		Fixed-rate investment securities	Interest income/(expense)	(7,671)
Total		$	(11,232)			$	10,632
Nine Months Ended September 30, 2022
Interest rate contracts	Interest income/(expense)	$	(7,889)	Fixed-rate debt	Interest income/(expense)	$	8,193
Interest rate contracts	Interest income/(expense)	159,397		Fixed-rate investment securities	Interest income/(expense)	(159,767)
Total		$	151,508			$	(151,574)

The effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income were as follows:

		Three Months Ended September 30,				Three Months Ended September 30,
(dollars in thousands)		2023		2022		2023		2022
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss) Reclassified from AOCI into Income	Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Gain (Loss) Reclassified from AOCI into Income
Interest rate contracts	Interest income/(expense)	$	(15,574)	$	(36,755)	$	(5,960)	$	(749)
		Nine Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss) Reclassified from AOCI into Income	Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Gain (Loss) Reclassified from AOCI into Income
Interest rate contracts	Interest income/(expense)	$	4,302	$	(49,679)	$	17,481	$	139

The effect of derivatives not designated as hedging instruments on the consolidated statements of income were as follows:

		Three Months Ended September 30,
(dollars in thousands)		2023		2022
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative
Interest rate contracts (1)	Other income/(expense)	$	426	$	108
Mortgage contracts	Mortgage banking revenue	391		638
Foreign currency contracts	Other income/(expense)	(3)		75
Total		$	814	$	821
		Nine Months Ended September 30,
		2023		2022
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative
Interest rate contracts (1)	Other income/(expense)	$	1,125	$	1,058
Mortgage contracts	Mortgage banking revenue	760		(735)
Foreign currency contracts	Other income/(expense)	(16)		113
Total		$	1,869	$	436

(1)Includes the valuation differences between the customer and offsetting swaps.

Summary of Derivatives Not Designated as Hedging Instruments

The following table summarizes Old National’s derivatives not designated as hedges:

	September 30, 2023						December 31, 2022
			Fair Value						Fair Value
(dollars in thousands)	Notional		Assets (1)		Liabilities (2)		Notional		Assets (1)		Liabilities (2)
Interest rate lock commitments	$	42,492	$	—	$	146	$	21,401	$	93	$	—
Forward mortgage loan contracts	54,730		1,031		—		30,330		32		—
Customer interest rate swaps	5,775,638		1,208		379,864		5,220,363		5,676		326,924
Counterparty interest rate swaps (3)	5,775,634		222,907		1,213		5,220,363		151,111		5,711
Customer foreign currency contracts	13,234		218		156		8,341		253		42
Counterparty foreign currency contracts	12,970		255		141		8,297		72		168
Total			$	225,619	$	381,520			$	157,237	$	332,845

(1)Derivative assets are included in other assets on the balance sheet.

(2)Derivative liabilities are included in other liabilities on the balance sheet.

(3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally cleared variation margin rules.

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Commitments, Contingencies, and Financial Guarantees (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Summary of Loan Commitments

The following table summarizes Old National’s other borrowings:

(dollars in thousands)	September 30, 2023		December 31, 2022
Old National Bancorp:
Senior unsecured notes (fixed rate 4.125%) maturing August 2024	$	175,000	$	175,000
Unamortized debt issuance costs related to senior unsecured notes	(130)		(247)
Subordinated debentures (fixed rate 5.875%) maturing September 2026	150,000		150,000
Junior subordinated debentures (rates of 6.95% to 9.21%) maturing    July 2031 to September 2037	136,643		136,643
Other basis adjustments	19,496		23,363
Old National Bank:
Finance lease liabilities	21,595		13,469
Subordinated debentures (variable rate 9.99%) maturing October 2025	12,000		12,000
Leveraged loans for NMTC (fixed rates of 1.00% to 1.43%)    maturing December 2046 to June 2060	143,745		143,187
Other (1)	205,106		89,588
Total other borrowings	$	863,455	$	743,003

(1)Includes overnight borrowings to collateralize certain derivative positions totaling $204.5 million at September 30, 2023 and $88.0 million at December 31, 2022.

The following table summarizes the terms of our outstanding junior subordinated debentures at September 30, 2023:

(dollars in thousands)					Rate at September 30, 2023
Name of Trust	Issuance Date	Issuance Amount		Rate		Maturity Date
Bridgeview Statutory Trust I	July 2001	$	15,464	3-month SOFR plus 3.58%	9.21%	July 31, 2031
Bridgeview Capital Trust II	December 2002	15,464		3-month SOFR plus 3.35%	8.92%	January 7, 2033
First Midwest Capital Trust I	November 2003	37,825		6.95% fixed	6.95%	December 1, 2033
St. Joseph Capital Trust II	March 2005	5,155		3-month SOFR plus 1.75%	7.42%	March 17, 2035
Northern States Statutory Trust I	September 2005	10,310		3-month SOFR plus 1.80%	7.47%	September 15, 2035
Anchor Capital Trust III	August 2005	5,000		3-month SOFR plus 1.55%	7.21%	September 30, 2035
Great Lakes Statutory Trust II	December 2005	6,186		3-month SOFR plus 1.40%	7.07%	December 15, 2035
Home Federal Statutory    Trust I	September 2006	15,464		3-month SOFR plus 1.65%	7.32%	September 15, 2036
Monroe Bancorp Capital    Trust I	July 2006	3,093		3-month SOFR plus 1.60%	7.17%	October 7, 2036
Tower Capital Trust 3	December 2006	9,279		3-month SOFR plus 1.69%	7.36%	March 1, 2037
Monroe Bancorp Statutory    Trust II	March 2007	5,155		3-month SOFR plus 1.60%	7.27%	June 15, 2037
Great Lakes Statutory Trust III	June 2007	8,248		3-month SOFR plus 1.70%	7.37%	September 15, 2037
Total		$	136,643

The following table summarizes Old National Bank’s unfunded loan commitments and standby letters of credit:

(dollars in thousands)	September 30, 2023		December 31, 2022
Unfunded loan commitments	$	9,142,538	$	8,979,334
Standby letters of credit (1)	184,027		174,070

(1)Notional amount, which represents the maximum amount of future funding requirements. The carrying value was $1.2 million at September 30, 2023 and $0.8 million at December 31, 2022.

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which we have elected the fair value option, are summarized below: 

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Equity securities	$	69,880	$	69,880	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury	548,126		548,126		—		—
U.S. government-sponsored entities and agencies	1,142,900		—		1,142,900		—
Mortgage-backed securities - Agency	3,862,705		—		3,862,705		—
States and political subdivisions	544,944		—		544,944		—
Pooled trust preferred securities	11,125		—		11,125		—
Other securities	304,961		—		304,961		—
Loans held-for-sale	122,033		—		122,033		—
Derivative assets	227,833		—		227,833		—
Financial Liabilities
Derivative liabilities	409,269		—		409,269		—

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Equity securities	$	52,507	$	52,507	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury	200,927		200,927		—		—
U.S. government-sponsored entities and agencies	1,175,080		—		1,175,080		—
Mortgage-backed securities - Agency	4,369,902		—		4,369,902		—
States and political subdivisions	663,852		—		663,852		—
Pooled trust preferred securities	10,811		—		10,811		—
Other securities	353,140		—		353,140		—
Loans held-for-sale	11,926		—		11,926		—
Derivative assets	169,001		—		169,001		—
Financial Liabilities
Derivative liabilities	380,704		—		380,704		—

Schedule of Assets Measured at Fair Value on a Non-Recurring Basis

Assets measured at fair value at September 30, 2023 on a non-recurring basis are summarized below:

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral Dependent Loans:
Commercial loans	$	10,783	$	—	$	—	$	10,783
Commercial real estate loans	75,720		—		—		75,720
Foreclosed Assets:
Commercial	1,879		—		—		1,879

Assets measured at fair value at December 31, 2022 on a non-recurring basis are summarized below:

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral Dependent Loans:
Commercial loans	$	22,562	$	—	$	—	$	22,562
Commercial real estate loans	48,026		—		—		48,026

Schedule of Quantitative Information about Significant Unobservable Inputs Used in Fair Value Measurements

The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:

(dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Input	Range (Weighted Average) (1)
September 30, 2023
Collateral Dependent Loans
Commercial loans	$	10,783	Discounted	Discount for type of property,	10% - 40% (33%)
			cash flow	age of appraisal, and current status
Commercial real estate loans	75,720		Discounted	Discount for type of property,	1% - 38% (17%)
			cash flow	age of appraisal, and current status
Foreclosed Assets
Commercial real estate	1,879		Fair value of	Discount for type of property,	4% - 17% (6%)
			collateral	age of appraisal, and current status
December 31, 2022
Collateral Dependent Loans
Commercial loans	$	22,562	Discounted	Discount for type of property,	10% - 47% (28%)
			cash flow	age of appraisal, and current status
Commercial real estate loans	48,026		Discounted	Discount for type of property,	1% - 26% (11%)
			cash flow	age of appraisal, and current status

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

Schedule of Difference Between the Aggregate Fair Value and the Aggregate Remaining Principal Balance

The difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was as follows: 

(dollars in thousands)	Aggregate Fair Value		Difference		Contractual Principal
September 30, 2023
Loans held-for-sale	$	122,033	$	72	$	121,961
December 31, 2022
Loans held-for-sale	$	11,926	$	221	$	11,705

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:

(dollars in thousands)	Other Gains and (Losses)		Interest Income		Interest (Expense)		Total Changes in Fair Values Included in Current Period Earnings
Three Months Ended September 30, 2023
Loans held-for-sale	$	(327)	$	12	$	—	$	(315)
Three Months Ended September 30, 2022
Loans held-for-sale	$	(710)	$	1	$	—	$	(709)
Nine Months Ended September 30, 2023
Loans held-for-sale	$	(151)	$	2	$	—	$	(149)
Nine Months Ended September 30, 2022
Loans held-for-sale	$	(1,775)	$	7	$	—	$	(1,768)

Carrying Amounts and Estimated Fair Values of Financial Instruments, Not Carried at Fair Value

The carrying amounts and estimated exit price fair values of financial instruments not carried at fair value were as follows: 

			Fair Value Measurements at September 30, 2023 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Cash, due from banks, money market,    and other interest-earning investments	$	1,663,430	$	1,663,430	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies	824,223		—		617,010		—
Mortgage-backed securities - Agency	1,043,585		—		847,652		—
State and political subdivisions	1,160,106		—		928,959		—
Loans, net:
Commercial	9,207,028		—		—		9,078,129
Commercial real estate	13,770,202		—		—		13,302,502
Residential real estate	6,675,508		—		—		5,630,855
Consumer credit	2,621,114		—		—		2,526,277
Accrued interest receivable	209,503		1,093		45,597		162,813
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	10,091,352	$	10,091,352	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits	21,585,620		21,585,620		—		—
Time deposits	5,575,704		—		5,527,361		—
Federal funds purchased and interbank borrowings	918		918		—		—
Securities sold under agreements to repurchase	279,061		279,061		—		—
FHLB advances	4,412,576		—		4,167,911		—
Other borrowings	863,455		—		843,629		—
Accrued interest payable	46,934		—		46,934		—
Standby letters of credit	1,224		—		—		1,224
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,582

			Fair Value Measurements at December 31, 2022 Using
(dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Cash, due from banks, money market,    and other interest-earning investments	$	728,412	$	728,412	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies	819,168		—		656,358		—
Mortgage-backed securities - Agency	1,106,817		—		982,963		—
State and political subdivisions	1,163,162		—		1,004,361		—
Loans, net:
Commercial	9,386,862		—		—		9,066,583
Commercial real estate	12,317,825		—		—		11,867,851
Residential real estate	6,438,525		—		—		5,372,491
Consumer credit	2,676,758		—		—		2,557,115
Accrued interest receivable	190,521		758		52,081		137,682
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	11,930,798	$	11,930,798	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits	20,056,252		20,056,252		—		—
Time deposits	3,013,780		—		2,976,389		—
Federal funds purchased and interbank borrowings	581,489		581,489		—		—
Securities sold under agreements to repurchase	432,804		432,804		—		—
FHLB advances	3,829,018		—		3,739,780		—
Other borrowings	743,003		—		703,156		—
Accrued interest payable	19,547		—		19,547		—
Standby letters of credit	755		—		—		755
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,666

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Acquisition and Divestiture Activity (Details) $ / shares in Units, $ in Thousands			9 Months Ended
	Oct. 26, 2023 USD ($) $ / shares	Nov. 18, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Assets			$ 49,059,448		$ 46,763,372
Total loans			32,577,834		31,123,641
Deposits			37,252,676		$ 35,000,830
Deposits, health savings accounts		$ 382,000
Gain on sale of health savings accounts business		$ 90,700
First Midwest
Business Acquisition [Line Items]
Transaction costs, expensed			23,200	$ 100,600
CapStar Financial Holdings, Inc. | Subsequent Event
Business Acquisition [Line Items]
Shares exchange ratio	1.155
Value of issuance common stock shares	$ 344,400
Share price (in dollars per share) | $ / shares	$ 16.64
Weighted average closing stock price	30 days
CapStar Financial Holdings, Inc. | CapStar Financial Holdings, Inc.
Business Acquisition [Line Items]
Assets			3,300,000
Total loans			2,300,000
Deposits			$ 2,800,000

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Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net income	$ 147,876	$ 155,036	$ 146,600	$ 140,153	$ 114,985	$ (27,586)	$ 449,512	$ 227,552
Preferred dividends	(4,034)			(4,034)			(12,101)	(10,084)
Net income applicable to common shareholders	$ 143,842			$ 136,119			$ 437,411	$ 217,468
Weighted average common shares outstanding:
Weighted average common shares outstanding (basic) (in shares)	290,648			290,961			290,763	269,843
Effect of dilutive securities:
Restricted stock (in shares)	1,069			1,516			1,045	1,273
Stock appreciation rights (in shares)	0			6			1	7
Weighted average diluted shares outstanding (in shares)	291,717			292,483			291,809	271,123
Basic Net Income Per Common Share (in dollars per share)	$ 0.49			$ 0.47			$ 1.50	$ 0.81
Diluted Net Income Per Common Share (in dollars per share)	$ 0.49			$ 0.47			$ 1.50	$ 0.80

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Investment Securities - Amortized Cost and Fair Value of Available-for-Sale Investment Securities Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Available-for-Sale
Total	$ 7,719,944	$ 7,772,603
Unrealized Gains	234	3,028
Unrealized Losses	(1,143,301)	(847,474)
Basis adjustments	(162,116)	(154,445)
Fair Value	6,414,761	6,773,712
Held-to-Maturity
Allowance for securities held-to-maturity	(150)	(150)
Total held-to-maturity securities	3,027,914	3,089,147
Unrealized Gains	0	221
Unrealized Losses	(634,293)	(445,686)
Basis adjustments	0	0
Fair Value	2,393,621	2,643,682
U.S. Treasury
Available-for-Sale
Total	616,608	253,148
Unrealized Gains	98	5
Unrealized Losses	(10,258)	(5,189)
Basis adjustments	(58,322)	(47,037)
Fair Value	548,126	200,927
U.S. government-sponsored entities and agencies
Available-for-Sale
Total	1,475,307	1,451,736
Unrealized Gains	0	0
Unrealized Losses	(229,113)	(169,248)
Basis adjustments	(103,294)	(107,408)
Fair Value	1,142,900	1,175,080
Held-to-Maturity
Amortized Cost	824,223	819,168
Unrealized Gains	0	0
Unrealized Losses	(207,213)	(162,810)
Basis adjustments	0	0
Fair Value	617,010	656,358
Mortgage-backed securities
Available-for-Sale
Total	4,686,448	4,986,354
Unrealized Gains	17	976
Unrealized Losses	(823,760)	(617,428)
Basis adjustments	0	0
Fair Value	3,862,705	4,369,902
Held-to-Maturity
Amortized Cost	1,043,585	1,106,817
Unrealized Gains	0	0
Unrealized Losses	(195,933)	(123,854)
Basis adjustments	0	0
Fair Value	847,652	982,963
States and political subdivisions
Available-for-Sale
Total	592,495	688,159
Unrealized Gains	7	1,789
Unrealized Losses	(47,058)	(26,096)
Basis adjustments	(500)	0
Fair Value	544,944	663,852
Held-to-Maturity
Amortized Cost	1,160,256	1,163,312
Unrealized Gains	0	221
Unrealized Losses	(231,147)	(159,022)
Basis adjustments	0	0
Fair Value	929,109	1,004,511
Pooled trust preferred securities
Available-for-Sale
Total	13,794	13,783
Unrealized Gains	0	0
Unrealized Losses	(2,669)	(2,972)
Basis adjustments	0	0
Fair Value	11,125	10,811
Other securities
Available-for-Sale
Total	335,292	379,423
Unrealized Gains	112	258
Unrealized Losses	(30,443)	(26,541)
Basis adjustments	0	0
Fair Value	$ 304,961	$ 353,140

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Investment Securities - Schedule of Proceeds from Sales or Calls and Realized Gain and Losses of Available-for-sale Investment Securities and Other Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Proceeds from Sale, Maturity and Collection of Investments [Abstract]
Proceeds	$ 28,531	$ 5,221	$ 111,419	$ 78,568
Realized gains	54	17	1,002	528
Realized losses	$ (295)	$ (189)	$ (6,442)	$ (443)

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Investment Securities - Expected Maturities of Investment Securities Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Available-for-sale, Amortized Cost
Within one year	$ 539,157
One to five years	1,567,565
Five to ten years	3,987,461
Beyond ten years	1,625,761
Total	7,719,944	$ 7,772,603
Available-for-sale, Fair Value
Within one year	535,193
One to five years	1,395,867
Five to ten years	3,285,183
Beyond ten years	1,198,518
Total	$ 6,414,761	6,773,712
Available-for-sale, Weighted Average Yield
Within one year	4.71%
One to five years	2.80%
Five to ten years	2.37%
Beyond ten years	2.46%
Total	2.64%
Held-to-Maturity, Amortized Cost
One to five years	$ 161,837
Five to ten years	954,756
Beyond ten years	1,911,321
Total held-to-maturity securities	3,027,914	3,089,147
Held-to-Maturity, Fair Value
One to five years	127,716
Five to ten years	797,284
Beyond ten years	1,468,621
Total	$ 2,393,621	$ 2,643,682
Held-to-Maturity, Weighted Average Yield
One to five years	2.68%
Five to ten years	2.64%
Beyond ten years	2.71%
Total	2.69%

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Investment Securities - Available-for-Sale and Held-to-Maturity Investment Securities with Unrealized Losses by Aggregated Major Security Type and Length of Time in Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	$ 465,307	$ 4,465,728
Available-for-sale, less than 12 months, unrealized losses	(14,072)	(480,166)
Available-for-sale, 12 months or longer, fair value	5,559,525	1,992,246
Available-for-sale, 12 months or longer, unrealized losses	(1,129,229)	(367,308)
Available-for-sale, fair value	6,024,832	6,457,974
Available-for-sale, unrealized losses	(1,143,301)	(847,474)
U.S. Treasury
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	37,492	130,967
Available-for-sale, less than 12 months, unrealized losses	(144)	(3,264)
Available-for-sale, 12 months or longer, fair value	178,540	66,992
Available-for-sale, 12 months or longer, unrealized losses	(10,114)	(1,925)
Available-for-sale, fair value	216,032	197,959
Available-for-sale, unrealized losses	(10,258)	(5,189)
U.S. government-sponsored entities and agencies
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	32,821	454,854
Available-for-sale, less than 12 months, unrealized losses	(58)	(75,795)
Available-for-sale, 12 months or longer, fair value	1,110,079	720,226
Available-for-sale, 12 months or longer, unrealized losses	(229,055)	(93,453)
Available-for-sale, fair value	1,142,900	1,175,080
Available-for-sale, unrealized losses	(229,113)	(169,248)
Mortgage-backed securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	124,895	3,207,319
Available-for-sale, less than 12 months, unrealized losses	(5,798)	(358,507)
Available-for-sale, 12 months or longer, fair value	3,736,306	1,116,205
Available-for-sale, 12 months or longer, unrealized losses	(817,962)	(258,921)
Available-for-sale, fair value	3,861,201	4,323,524
Available-for-sale, unrealized losses	(823,760)	(617,428)
States and political subdivisions
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	258,362	414,813
Available-for-sale, less than 12 months, unrealized losses	(7,749)	(25,555)
Available-for-sale, 12 months or longer, fair value	260,563	2,703
Available-for-sale, 12 months or longer, unrealized losses	(39,309)	(541)
Available-for-sale, fair value	518,925	417,516
Available-for-sale, unrealized losses	(47,058)	(26,096)
Pooled trust preferred securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	0	0
Available-for-sale, less than 12 months, unrealized losses	0	0
Available-for-sale, 12 months or longer, fair value	11,125	10,811
Available-for-sale, 12 months or longer, unrealized losses	(2,669)	(2,972)
Available-for-sale, fair value	11,125	10,811
Available-for-sale, unrealized losses	(2,669)	(2,972)
Other securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Available-for-sale, less than 12 months, fair value	11,737	257,775
Available-for-sale, less than 12 months, unrealized losses	(323)	(17,045)
Available-for-sale, 12 months or longer, fair value	262,912	75,309
Available-for-sale, 12 months or longer, unrealized losses	(30,120)	(9,496)
Available-for-sale, fair value	274,649	333,084
Available-for-sale, unrealized losses	$ (30,443)	$ (26,541)

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Investment Securities - Held-to-Maturity with Unrecognized Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value
Less than 12 months	$ 64,441	$ 1,560,831
12 months or longer	2,329,330	1,052,753
Total	2,393,771	2,613,584
Unrecognized Losses
Less than 12 months	(4,877)	(280,316)
12 months or longer	(629,416)	(165,370)
Total	(634,293)	(445,686)
U.S. government-sponsored entities and agencies
Fair Value
Less than 12 months	0	354,293
12 months or longer	617,010	302,066
Total	617,010	656,359
Unrecognized Losses
Less than 12 months	0	(110,523)
12 months or longer	(207,213)	(52,287)
Total	(207,213)	(162,810)
Mortgage-backed securities
Fair Value
Less than 12 months	0	367,849
12 months or longer	847,652	615,114
Total	847,652	982,963
Unrecognized Losses
Less than 12 months	0	(42,438)
12 months or longer	(195,933)	(81,416)
Total	(195,933)	(123,854)
States and political subdivisions
Fair Value
Less than 12 months	64,441	838,689
12 months or longer	864,668	135,573
Total	929,109	974,262
Unrecognized Losses
Less than 12 months	(4,877)	(127,355)
12 months or longer	(226,270)	(31,667)
Total	$ (231,147)	$ (159,022)

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Investment Securities - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) security instrument	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) security instrument	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Summary of Investment Holdings [Line Items]
Transferred from available-for-sale to held-for-maturity	$ 132,300,000		$ 132,300,000		$ 148,900,000
Allowance for credit losses for available-for-sale debt securities	0		0		0
Allowance for securities held-to-maturity	150,000		150,000		150,000
Accrued interest receivable	$ 38,000,000		$ 38,000,000		50,900,000
Number of securities in security portfolio | security	3,007		3,007
Number of securities in unrealized loss position | security	2,917		2,917
Fair Value	$ 6,414,761,000		$ 6,414,761,000		6,773,712,000
Unrealized losses	1,143,301,000		1,143,301,000		847,474,000
Equity securities, at fair value	69,880,000		69,880,000		52,507,000
Losses on equity securities	800,000	$ 700,000	1,400,000	$ 4,900,000
Impairments on equity securities without readily determinable fair value			0	$ 0
Other Assets
Summary of Investment Holdings [Line Items]
Equity securities without readily determinable fair value	418,300,000		418,300,000		396,800,000
Other Assets | Partnership Interest
Summary of Investment Holdings [Line Items]
Equity securities without readily determinable fair value	242,300,000		242,300,000
Other Assets | Initiatives in Low-to-Moderate Income Neighborhoods
Summary of Investment Holdings [Line Items]
Equity securities without readily determinable fair value	$ 176,000,000		$ 176,000,000
Pooled trust preferred securities
Summary of Investment Holdings [Line Items]
Number of instruments held | instrument	2		2
Fair Value	$ 11,125,000		$ 11,125,000		10,811,000
Unrealized losses	$ 2,669,000		$ 2,669,000		$ 2,972,000

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Loans and Allowance for Credit Losses - Additional Information (Details)	9 Months Ended
	Sep. 30, 2023 USD ($) segment portfolio	Dec. 31, 2022 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of loan portfolios | portfolio	4
Number of loan segments | segment	7
Accrued interest receivable on loans	$ 162,800,000	$ 137,700,000
Loan placed on nonaccrual when past due, number of days	90 days
Loan participations	$ 2,800,000,000
Loan participations sold	1,200,000,000
Loan participations retained	1,600,000,000
Unfunded commitments on TDRs	$ 0
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Percentage of risk-based capital (in percent)	245.00%
Regulatory guideline limit (in percent)	300.00%

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Loans and Allowance for Credit Losses - Schedule of Composition of Loans and Impact of Adoption (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	$ 32,577,834		$ 31,123,641
Allowance for credit losses on loans	(303,982)	$ (300,555)	(303,671)	$ (302,254)	$ (288,003)	$ (107,341)
Net loans	32,273,852		30,819,970
Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0		0
After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	32,577,834		31,123,641
Allowance for credit losses on loans	(303,982)		(303,671)
Net loans	32,273,852		30,819,970
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	9,333,448		9,508,904
Allowance for credit losses on loans	(124,755)	(127,403)	(120,612)	(112,413)	(102,819)	(27,232)
Commercial | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	(226,353)		(210,280)
Commercial | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	9,107,095		9,298,624
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	13,916,221		12,457,070
Allowance for credit losses on loans	(144,975)	(136,897)	(138,244)	(144,090)	(141,802)	(64,004)
Commercial real estate | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	(165,593)		(158,322)
Commercial real estate | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	13,750,628		12,298,748
BBCC
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses on loans	(2,709)	(2,776)	(2,431)	(2,168)	(2,064)	(2,458)
BBCC | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	391,946		368,602
BBCC | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	391,946		368,602
Residential real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	6,696,288		6,460,441
Allowance for credit losses on loans	(20,780)	(20,421)	(21,916)	(21,256)	(19,729)	(9,347)
Residential real estate | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0		0
Residential real estate | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	6,696,288		6,460,441
Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	2,631,877		2,697,226
Consumer | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	(2,631,877)		(2,697,226)
Indirect
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,047,224		1,034,257
Allowance for credit losses on loans	(1,321)	(1,407)	(1,532)	(1,585)	(1,641)	(1,743)
Indirect | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,047,224		1,034,257
Indirect | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,047,224		1,034,257
Direct
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	542,689		629,186
Allowance for credit losses on loans	(3,571)	(4,755)	(12,116)	(16,096)	(14,412)	(528)
Direct | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	542,689		629,186
Direct | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	542,689		629,186
Home equity
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,041,964		1,033,783
Allowance for credit losses on loans	(5,871)	$ (6,896)	(6,820)	$ (4,646)	$ (5,536)	$ (2,029)
Home equity | Portfolio Segment Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,041,964		1,033,783
Home equity | After Reclassifications
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,041,964		1,033,783
Direct Finance Leases
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	$ 173,000		$ 188,100

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Loans and Allowance for Credit Losses - Schedule of Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	$ 300,555	$ 288,003	$ 303,671	$ 107,341
Allowance Established for Acquired PCD Loans	0	10,558	0	89,089
Charge-offs	(22,750)	(11,440)	(55,261)	(20,200)
Recoveries	3,062	3,845	9,052	8,073
Provision for Loan Losses	23,115	11,288	46,520	117,951
Balance at End of Period	303,982	302,254	303,982	302,254
Commercial
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	127,403	102,819	120,612	27,232
Allowance Established for Acquired PCD Loans	0	3,740	0	38,780
Charge-offs	(16,705)	(2,696)	(37,459)	(5,919)
Recoveries	1,616	2,206	3,713	3,219
Provision for Loan Losses	12,441	6,344	37,889	49,101
Balance at End of Period	124,755	112,413	124,755	112,413
Commercial real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	136,897	141,802	138,244	64,004
Allowance Established for Acquired PCD Loans	0	6,818	0	49,419
Charge-offs	(2,291)	(4,772)	(5,938)	(5,596)
Recoveries	102	287	1,394	789
Provision for Loan Losses	10,267	(45)	11,275	35,474
Balance at End of Period	144,975	144,090	144,975	144,090
BBCC
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	2,776	2,064	2,431	2,458
Allowance Established for Acquired PCD Loans	0	0	0	0
Charge-offs	(1,049)	0	(1,171)	(48)
Recoveries	70	108	174	256
Provision for Loan Losses	912	(4)	1,275	(498)
Balance at End of Period	2,709	2,168	2,709	2,168
Residential real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	20,421	19,729	21,916	9,347
Allowance Established for Acquired PCD Loans	0	0	0	136
Charge-offs	(15)	(20)	(256)	(344)
Recoveries	28	66	153	636
Provision for Loan Losses	346	1,481	(1,033)	11,481
Balance at End of Period	20,780	21,256	20,780	21,256
Indirect
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	1,407	1,641	1,532	1,743
Allowance Established for Acquired PCD Loans	0	0	0	0
Charge-offs	(490)	(624)	(2,089)	(1,636)
Recoveries	325	379	1,349	921
Provision for Loan Losses	79	189	529	557
Balance at End of Period	1,321	1,585	1,321	1,585
Direct
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	4,755	14,412	12,116	528
Allowance Established for Acquired PCD Loans	0	0	0	31
Charge-offs	(2,180)	(3,299)	(8,018)	(6,550)
Recoveries	580	442	1,798	1,712
Provision for Loan Losses	416	4,541	(2,325)	20,375
Balance at End of Period	3,571	16,096	3,571	16,096
Home equity
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	6,896	5,536	6,820	2,029
Allowance Established for Acquired PCD Loans	0	0	0	723
Charge-offs	(20)	(29)	(330)	(107)
Recoveries	341	357	471	540
Provision for Loan Losses	(1,346)	(1,218)	(1,090)	1,461
Balance at End of Period	$ 5,871	$ 4,646	$ 5,871	$ 4,646

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Loans and Allowance for Credit Losses - Schedule of Allowance for Credit Losses on Unfunded Loan Commitments (Details) - Unfunded Loan Commitment - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Balance at beginning of period	$ 37,007	$ 21,966	$ 32,188	$ 10,879
Provision for credit losses on unfunded loan commitments acquired during the period	0	0	0	11,013
(Recapture of) provision for credit losses on unfunded loan commitments	(4,047)	4,203	772	4,277
Balance at end of period	$ 32,960	$ 26,169	$ 32,960	$ 26,169

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Loans and Allowance for Credit Losses - Schedule of Risk Rating and Payment Performance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 32,577,834		$ 32,577,834		$ 31,123,641
2023	593		603
2022	5,360		9,140
2021	12,829		26,689
2020	1,868		3,034
2019	280		7,937
Prior	736		4,463
Revolving	1,084		3,395
Total	22,750	$ 11,440	55,261	$ 20,200
Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	32,577,834		32,577,834		31,123,641
Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	9,333,448		9,333,448		9,508,904
Total	16,705	2,696	37,459	5,919
Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,662,694		1,662,694		2,473,145
2022	1,866,341		1,866,341		1,851,604
2021	1,156,660		1,156,660		880,723
2020	640,366		640,366		802,628
2019	516,231		516,231		382,993
Prior	587,915		587,915		423,484
Revolving	2,174,229		2,174,229		2,118,835
Revolving to Term	502,659		502,659		365,212
Total loans	9,107,095		9,107,095		9,298,624
2023	0		0
2022	4,154		6,254
2021	12,271		23,432
2020	0		120
2019	0		6,789
Prior	63		302
Revolving	217		562
Total	16,705		37,459
Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	13,916,221		13,916,221		12,457,070
Total	2,291	4,772	5,938	5,596
Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,885,506		1,885,506		3,193,582
2022	3,583,898		3,583,898		2,928,035
2021	2,826,313		2,826,313		2,050,913
2020	1,785,467		1,785,467		1,384,735
2019	1,262,289		1,262,289		823,735
Prior	1,454,925		1,454,925		1,139,730
Revolving	83,549		83,549		57,818
Revolving to Term	868,681		868,681		720,200
Total loans	13,750,628		13,750,628		12,298,748
2023	0		0
2022	0		54
2021	0		735
2020	1,744		2,144
2019	0		0
Prior	547		3,005
Revolving	0		0
Total	2,291		5,938
BBCC
Financing Receivable, Credit Quality Indicator [Line Items]
Total	1,049	0	1,171	48
BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	77,267		77,267		92,738
2022	80,799		80,799		64,973
2021	51,998		51,998		53,229
2020	43,470		43,470		38,138
2019	31,663		31,663		24,464
Prior	15,859		15,859		11,690
Revolving	69,328		69,328		61,565
Revolving to Term	21,562		21,562		21,805
Total loans	391,946		391,946		368,602
2023	499		499
2022	501		548
2021	49		77
2020	0		47
2019	0		0
Prior	0		0
Revolving	0		0
Total	1,049		1,171
Residential real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2023	362,518		362,518		1,327,227
2022	1,508,462		1,508,462		1,946,321
2021	1,864,634		1,864,634		1,826,623
2020	1,736,577		1,736,577		479,402
2019	447,754		447,754		138,086
Prior	776,064		776,064		742,687
Revolving	0		0		7
Revolving to Term	279		279		88
Total loans	6,696,288		6,696,288		6,460,441
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	15		256
Revolving	0		0
Total	15	20	256	344
Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	6,696,288		6,696,288		6,460,441
Residential real estate | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	362,518		362,518		1,327,168
2022	1,504,933		1,504,933		1,945,792
2021	1,861,729		1,861,729		1,825,762
2020	1,732,039		1,732,039		478,529
2019	444,411		444,411		136,260
Prior	750,037		750,037		712,175
Revolving	0		0		7
Revolving to Term	279		279		88
Total loans	6,655,946		6,655,946		6,425,781
Residential real estate | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		59
2022	3,529		3,529		529
2021	2,905		2,905		861
2020	4,538		4,538		873
2019	3,343		3,343		1,826
Prior	26,027		26,027		30,512
Revolving	0		0		0
Revolving to Term	0		0		0
Total loans	40,342		40,342		34,660
Indirect
Financing Receivable, Credit Quality Indicator [Line Items]
2023	309,340		309,340		504,758
2022	391,282		391,282		250,481
2021	182,410		182,410		144,910
2020	96,752		96,752		82,835
2019	47,238		47,238		31,788
Prior	20,006		20,006		19,423
Revolving	0		0		0
Revolving to Term	196		196		62
Total loans	1,047,224		1,047,224		1,034,257
2023	75		85
2022	276		954
2021	86		640
2020	12		153
2019	10		137
Prior	31		120
Revolving	0		0
Total	490	624	2,089	1,636
Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,047,224		1,047,224		1,034,257
Indirect | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	309,220		309,220		504,410
2022	390,012		390,012		249,407
2021	181,235		181,235		144,265
2020	96,148		96,148		82,304
2019	46,877		46,877		31,484
Prior	19,666		19,666		19,095
Revolving	0		0		0
Revolving to Term	196		196		62
Total loans	1,043,354		1,043,354		1,031,027
Indirect | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	120		120		348
2022	1,270		1,270		1,074
2021	1,175		1,175		645
2020	604		604		531
2019	361		361		304
Prior	340		340		328
Revolving	0		0		0
Revolving to Term	0		0		0
Total loans	3,870		3,870		3,230
Direct
Financing Receivable, Credit Quality Indicator [Line Items]
2023	84,836		84,836		133,049
2022	100,111		100,111		164,977
2021	108,061		108,061		78,020
2020	54,473		54,473		58,124
2019	35,381		35,381		45,626
Prior	91,081		91,081		60,738
Revolving	63,883		63,883		87,627
Revolving to Term	4,863		4,863		1,025
Total loans	542,689		542,689		629,186
2023	19		19
2022	429		1,330
2021	423		1,805
2020	112		570
2019	270		1,011
Prior	60		450
Revolving	867		2,833
Total	2,180	3,299	8,018	6,550
Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	542,689		542,689		629,186
Direct | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	84,749		84,749		132,934
2022	99,625		99,625		164,126
2021	107,539		107,539		77,406
2020	54,070		54,070		57,919
2019	35,065		35,065		45,299
Prior	87,207		87,207		59,212
Revolving	63,877		63,877		87,622
Revolving to Term	4,852		4,852		671
Total loans	536,984		536,984		625,189
Direct | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	87		87		115
2022	486		486		851
2021	522		522		614
2020	403		403		205
2019	316		316		327
Prior	3,874		3,874		1,526
Revolving	6		6		5
Revolving to Term	11		11		354
Total loans	5,705		5,705		3,997
Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1		1		1,085
2022	716		716		1,056
2021	606		606		2,015
2020	893		893		1,943
2019	1,501		1,501		1,777
Prior	10,546		10,546		15,954
Revolving	996,489		996,489		991,699
Revolving to Term	31,212		31,212		18,254
Total loans	1,041,964		1,041,964		1,033,783
2023	0		0
2022	0		0
2021	0		0
2020	0		0
2019	0		0
Prior	20		330
Revolving	0		0
Total	20	$ 29	330	$ 107
Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,041,964		1,041,964		1,033,783
Home equity | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1		1		919
2022	692		692		896
2021	387		387		1,849
2020	690		690		1,497
2019	743		743		983
Prior	5,736		5,736		11,646
Revolving	994,797		994,797		990,001
Revolving to Term	23,918		23,918		14,792
Total loans	1,026,964		1,026,964		1,022,583
Home equity | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		166
2022	24		24		160
2021	219		219		166
2020	203		203		446
2019	758		758		794
Prior	4,810		4,810		4,308
Revolving	1,692		1,692		1,698
Revolving to Term	7,294		7,294		3,462
Total loans	15,000		15,000		11,200
Pass | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,615,716		1,615,716		2,388,618
2022	1,690,168		1,690,168		1,754,364
2021	1,095,758		1,095,758		796,340
2020	553,187		553,187		738,208
2019	479,907		479,907		362,986
Prior	501,610		501,610		388,617
Revolving	2,000,147		2,000,147		1,988,763
Revolving to Term	454,995		454,995		329,119
Total loans	8,391,488		8,391,488		8,747,015
Pass | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,805,852		1,805,852		3,066,960
2022	3,432,536		3,432,536		2,828,758
2021	2,715,562		2,715,562		1,989,000
2020	1,734,359		1,734,359		1,219,025
2019	1,117,895		1,117,895		675,572
Prior	1,273,742		1,273,742		1,018,719
Revolving	73,590		73,590		57,818
Revolving to Term	796,442		796,442		689,553
Total loans	12,949,978		12,949,978		11,545,405
Pass | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	74,658		74,658		90,341
2022	76,281		76,281		64,161
2021	49,463		49,463		52,304
2020	42,980		42,980		36,868
2019	30,085		30,085		23,618
Prior	14,488		14,488		11,333
Revolving	66,281		66,281		60,016
Revolving to Term	18,582		18,582		18,881
Total loans	372,818		372,818		357,522
Criticized | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	27,469		27,469		40,856
2022	110,893		110,893		30,661
2021	21,107		21,107		63,557
2020	46,241		46,241		33,490
2019	22,674		22,674		9,195
Prior	54,738		54,738		5,312
Revolving	107,105		107,105		61,036
Revolving to Term	32,247		32,247		4,327
Total loans	422,474		422,474		248,434
Criticized | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	58,440		58,440		75,306
2022	62,461		62,461		34,422
2021	42,128		42,128		22,569
2020	28,716		28,716		82,637
2019	27,978		27,978		86,504
Prior	90,549		90,549		56,864
Revolving	9,959		9,959		0
Revolving to Term	21,023		21,023		23,282
Total loans	341,254		341,254		381,584
Criticized | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	2,295		2,295		1,504
2022	2,469		2,469		525
2021	1,114		1,114		368
2020	76		76		692
2019	1,110		1,110		353
Prior	0		0		0
Revolving	2,470		2,470		1,006
Revolving to Term	2,264		2,264		1,603
Total loans	11,798		11,798		6,051
Substandard | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	19,509		19,509		37,223
2022	40,694		40,694		47,522
2021	32,135		32,135		16,540
2020	38,892		38,892		22,925
2019	9,970		9,970		4,844
Prior	20,431		20,431		21,204
Revolving	66,977		66,977		67,402
Revolving to Term	15,417		15,417		25,143
Total loans	244,025		244,025		242,803
Substandard | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	21,214		21,214		46,231
2022	84,269		84,269		16,928
2021	23,589		23,589		24,319
2020	16,822		16,822		78,468
2019	78,165		78,165		57,824
Prior	41,313		41,313		21,591
Revolving	0		0		0
Revolving to Term	50,424		50,424		4,108
Total loans	315,796		315,796		249,469
Substandard | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	98		98		811
2022	733		733		143
2021	619		619		0
2020	24		24		421
2019	401		401		0
Prior	1,196		1,196		0
Revolving	100		100		543
Revolving to Term	438		438		682
Total loans	3,609		3,609		2,600
Nonaccrual | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		3,627
2022	5,748		5,748		1,453
2021	2,034		2,034		566
2020	284		284		0
2019	2,718		2,718		0
Prior	0		0		0
Revolving	0		0		1,634
Revolving to Term	0		0		6,623
Total loans	10,784		10,784		13,903
Nonaccrual | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		3,151
2022	2,983		2,983		9,541
2021	11,470		11,470		5,014
2020	1,428		1,428		0
2019	52		52		2,312
Prior	11,385		11,385		22,155
Revolving	0		0		0
Revolving to Term	792		792		3,257
Total loans	28,110		28,110		45,430
Nonaccrual | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	216		216		42
2022	451		451		37
2021	310		310		118
2020	340		340		0
2019	0		0		429
Prior	87		87		284
Revolving	477		477		0
Revolving to Term	278		278		639
Total loans	2,159		2,159		1,549
Doubtful | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		2,821
2022	18,838		18,838		17,604
2021	5,626		5,626		3,720
2020	1,762		1,762		8,005
2019	962		962		5,968
Prior	11,136		11,136		8,351
Revolving	0		0		0
Revolving to Term	0		0		0
Total loans	38,324		38,324		46,469
Doubtful | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		1,934
2022	1,649		1,649		38,386
2021	33,564		33,564		10,011
2020	4,142		4,142		4,605
2019	38,199		38,199		1,523
Prior	37,936		37,936		20,401
Revolving	0		0		0
Revolving to Term	0		0		0
Total loans	115,490		115,490		76,860
Doubtful | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Credit Quality Indicator [Line Items]
2023	0		0		40
2022	865		865		107
2021	492		492		439
2020	50		50		157
2019	67		67		64
Prior	88		88		73
Revolving	0		0		0
Revolving to Term	0		0		0
Total loans	$ 1,562		$ 1,562		$ 880

XML

Loans and Allowance for Credit Losses - Schedule of Past Due Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total loans	$ 32,577,834	$ 31,123,641
Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	32,577,834	31,123,641
Commercial
Financing Receivable, Past Due [Line Items]
Total loans	9,333,448	9,508,904
Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	9,107,095	9,298,624
Commercial real estate
Financing Receivable, Past Due [Line Items]
Total loans	13,916,221	12,457,070
Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	13,750,628	12,298,748
BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	391,946	368,602
Residential real estate
Financing Receivable, Past Due [Line Items]
Total loans	6,696,288	6,460,441
Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	6,696,288	6,460,441
Indirect
Financing Receivable, Past Due [Line Items]
Total loans	1,047,224	1,034,257
Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,047,224	1,034,257
Direct
Financing Receivable, Past Due [Line Items]
Total loans	542,689	629,186
Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	542,689	629,186
Home equity
Financing Receivable, Past Due [Line Items]
Total loans	1,041,964	1,033,783
Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,041,964	1,033,783
Total Past Due | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	142,960	186,223
Total Past Due | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	19,472	30,028
Total Past Due | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	43,615	81,444
Total Past Due | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	2,496	1,698
Total Past Due | Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	49,279	40,967
Total Past Due | Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	8,100	9,378
Total Past Due | Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	6,273	9,450
Total Past Due | Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	13,725	13,258
30-59 Days Past Due | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	64,785	104,589
30-59 Days Past Due | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	2,754	14,147
30-59 Days Past Due | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	15,954	47,240
30-59 Days Past Due | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,273	730
30-59 Days Past Due | Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	29,762	24,181
30-59 Days Past Due | Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	5,576	6,302
30-59 Days Past Due | Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	3,626	5,404
30-59 Days Past Due | Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	5,840	6,585
60-89 Days Past Due | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	22,039	17,713
60-89 Days Past Due | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	4,214	4,801
60-89 Days Past Due | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	6,295	1,312
60-89 Days Past Due | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	511	365
60-89 Days Past Due | Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	6,784	5,033
60-89 Days Past Due | Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,368	2,118
60-89 Days Past Due | Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,059	2,118
60-89 Days Past Due | Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,808	1,966
Past Due 90 Days or More | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	56,136	63,921
Past Due 90 Days or More | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	12,504	11,080
Past Due 90 Days or More | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	21,366	32,892
Past Due 90 Days or More | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	712	603
Past Due 90 Days or More | Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	12,733	11,753
Past Due 90 Days or More | Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,156	958
Past Due 90 Days or More | Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,588	1,928
Past Due 90 Days or More | Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	6,077	4,707
Current | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	32,434,874	30,937,418
Current | Commercial | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	9,087,623	9,268,596
Current | Commercial real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	13,707,013	12,217,304
Current | BBCC | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	389,450	366,904
Current | Residential real estate | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	6,647,009	6,419,474
Current | Indirect | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	1,039,124	1,024,879
Current | Direct | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	536,416	619,736
Current | Home equity | Segment Portfolio Reclassification, Adjusted Balance
Financing Receivable, Past Due [Line Items]
Total loans	$ 1,028,239	$ 1,020,525

XML

Loans and Allowance for Credit Losses - Schedule of Nonaccrual Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	$ 261,346	$ 238,178
Nonaccrual With No Related Allowance	43,153	41,318
Past Due 90 Days or More and Accruing	1,192	2,650
Commercial
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	49,108	60,372
Nonaccrual With No Related Allowance	13,432	7,873
Past Due 90 Days or More and Accruing	577	152
Commercial real estate
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	143,600	122,290
Nonaccrual With No Related Allowance	29,721	33,445
Past Due 90 Days or More and Accruing	104	0
BBCC
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	3,721	2,429
Nonaccrual With No Related Allowance	0	0
Past Due 90 Days or More and Accruing	0	0
Residential real estate
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	40,342	34,660
Nonaccrual With No Related Allowance	0	0
Past Due 90 Days or More and Accruing	0	1,808
Indirect
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	3,870	3,230
Nonaccrual With No Related Allowance	0	0
Past Due 90 Days or More and Accruing	54	28
Direct
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	5,705	3,997
Nonaccrual With No Related Allowance	0	0
Past Due 90 Days or More and Accruing	109	133
Home equity
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual Amortized Cost	15,000	11,200
Nonaccrual With No Related Allowance	0	0
Past Due 90 Days or More and Accruing	$ 348	$ 529

XML

Loans and Allowance for Credit Losses - Schedule of Types of Collateral (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	$ 32,577,834	$ 31,123,641
Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	207,556	168,623
Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	33,031	43,245
Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,674	4,408
Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	4,870	5,085
Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	6,562	7,414
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	9,333,448	9,508,904
Commercial | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	13,635	8,962
Commercial | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	31,856	42,754
Commercial | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	466	2,690
Commercial | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	288	1,611
Commercial | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	347	980
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	13,916,221	12,457,070
Commercial real estate | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	131,826	108,871
Commercial real estate | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Commercial real estate | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,205	1,718
Commercial real estate | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Commercial real estate | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	6,184	6,411
BBCC | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	2,131	1,939
BBCC | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,174	478
BBCC | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
BBCC | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	416	12
BBCC | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Residential real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	6,696,288	6,460,441
Residential real estate | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	40,342	34,660
Residential real estate | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Residential real estate | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Residential real estate | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Residential real estate | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Indirect
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,047,224	1,034,257
Indirect | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Indirect | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Indirect | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Indirect | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	3,870	3,230
Indirect | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Direct
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	542,689	629,186
Direct | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	4,622	2,991
Direct | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1	13
Direct | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	3	0
Direct | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	296	232
Direct | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	31	23
Home equity
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	1,041,964	1,033,783
Home equity | Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	15,000	11,200
Home equity | Blanket Lien
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Home equity | Investment Securities/Cash
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Home equity | Auto
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	0	0
Home equity | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans	$ 0	$ 0

XML

Loans and Allowance for Credit Losses - Schedule of Amortized Cost Basis of Loans with Modifications (Details) - Extended Maturity - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Financing Receivable, Allowance for Credit Losses [Line Items]
Term Extension	$ 97,346	$ 137,391
Total Class of Loans	0.30%	0.40%
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Term Extension	$ 3,502	$ 20,811
Total Class of Loans	0.00%	0.20%
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Term Extension	$ 93,844	$ 116,580
Total Class of Loans	0.70%	0.80%

XML

Loans and Allowance for Credit Losses - Schedule of Monitors the Performance of Loan Modifications to Borrowers Experiencing Financial Difficulty to Understand the Effectiveness of its Modification Efforts (Details) - Extended Maturity - Segment Portfolio Reclassification, Adjusted Balance $ in Thousands	Sep. 30, 2023 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	$ 137,391
30-59 Days Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	1,086
60-89 Days Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	0
Past Due 90 Days or More
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	2,541
Total Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	3,627
Current
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	133,764
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	20,811
Commercial | 30-59 Days Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	0
Commercial | 60-89 Days Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	0
Commercial | Past Due 90 Days or More
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	2,541
Commercial | Total Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	2,541
Commercial | Current
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	18,270
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	116,580
Commercial real estate | 30-59 Days Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	1,086
Commercial real estate | 60-89 Days Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	0
Commercial real estate | Past Due 90 Days or More
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	0
Commercial real estate | Total Past Due
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	1,086
Commercial real estate | Current
Financing Receivable, Allowance for Credit Losses [Line Items]
Total	$ 115,494

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Loans and Allowance for Credit Losses - Schedule of the nature of the Loan Modifications to Borrowers Experiencing Financial Difficulty (Details) - Extended Maturity	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Financing Receivable, Allowance for Credit Losses [Line Items]
Weighted- Average Term Extension (in months)	9 months 18 days	8 months 12 days
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Weighted- Average Term Extension (in months)	7 months 6 days	6 months
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Weighted- Average Term Extension (in months)	9 months 18 days	8 months 12 days

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Leases - Additional Information (Details)	Sep. 30, 2023
Minimum
Lessee, Lease, Description [Line Items]
Operating lease term	5 years
Finance lease term	5 years
Maximum
Lessee, Lease, Description [Line Items]
Operating lease term	20 years
Finance lease term	20 years

XML

Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Finance lease cost:
Total	$ 8,268	$ 8,355	$ 25,994	$ 23,252
Occupancy/Equipment expense
Lessee, Lease, Description [Line Items]
Operating lease cost	7,462	7,657	23,569	21,323
Occupancy expense
Finance lease cost:
Amortization of right-of-use assets	742	680	2,170	2,003
Sub-lease income	(119)	(87)	(281)	(389)
Interest expense
Finance lease cost:
Interest on lease liabilities	$ 183	$ 105	$ 536	$ 315

XML

Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
Operating lease right-of-use assets	$ 179,284	$ 189,714
Operating lease liabilities	199,937	211,964
Finance Leases
Premises and equipment, net	20,571	10,799
Other borrowings	$ 21,595	$ 13,469
Finance lease, right-of-use asset, statement of financial position [extensible enumeration]	Premises and equipment, net	Premises and equipment, net
Finance lease, liability, statement of financial position [extensible enumeration]	Other borrowings	Other borrowings
Weighted-Average Remaining Lease Term (in Years)
Operating leases	8 years 6 months	9 years 1 month 6 days
Finance leases	10 years 7 months 6 days	7 years 2 months 12 days
Weighted-Average Discount Rate
Operating leases	2.93%	2.88%
Finance leases	3.89%	3.30%

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Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 23,766	$ 22,223
Operating cash flows from finance leases	536	315
Financing cash flows from finance leases	$ 1,893	$ 1,839

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Leases - Schedule of Maturity Analysis of Lease Liability by Lease Classification (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
2023	$ 7,959
2024	31,183
2025	29,564
2026	28,622
2027	27,662
Thereafter	102,282
Total undiscounted lease payments	227,272
Amounts representing interest	(27,335)
Lease liability	199,937	$ 211,964
Finance Leases
2023	826
2024	3,357
2025	3,380
2026	2,154
2027	2,157
Thereafter	14,809
Total undiscounted lease payments	26,683
Amounts representing interest	(5,088)
Lease liability	$ 21,595	$ 13,469

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Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Goodwill [Roll Forward]
Balance at beginning of period	$ 1,998,716	$ 1,991,534	$ 1,998,716	$ 1,036,994
Acquisitions and adjustments	0	11,065	0	965,605
Balance at end of period	$ 1,998,716	$ 2,002,599	$ 1,998,716	$ 2,002,599

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)		3 Months Ended		9 Months Ended
	Aug. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Goodwill [Line Items]
Goodwill impairment	$ 0
Impairment charges				$ 0	$ 0
Amortization of intangibles		$ 6,040,000	$ 7,089,000	$ 18,286,000	$ 19,070,000
Minimum | Core Deposits and Other Intangible Assets
Goodwill [Line Items]
Estimated useful lives		5 years		5 years
Maximum | Core Deposits and Other Intangible Assets
Goodwill [Line Items]
Estimated useful lives		15 years		15 years

XML

Goodwill and Other Intangible Assets - Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 196,132	$ 226,885
Accumulated Amortization and Impairment	(88,013)	(100,480)
Net Carrying Amount	108,119	126,405
Core deposit
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	143,511	170,642
Accumulated Amortization and Impairment	(68,312)	(80,951)
Net Carrying Amount	75,199	89,691
Customer trust relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	52,621	56,243
Accumulated Amortization and Impairment	(19,701)	(19,529)
Net Carrying Amount	$ 32,920	$ 36,714

XML

Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense for Future Years (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2023 remaining	$ 5,869
2024	21,239
2025	18,358
2026	15,555
2027	12,867
Thereafter	34,231
Net Carrying Amount	$ 108,119	$ 126,405

XML

Qualified Affordable Housing Projects and Other Tax Credit Investments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Summary of Investment Holdings [Line Items]
Investment	$ 175,951		$ 175,951		$ 156,755
Unfunded commitment	81,654		81,654		65,342
Amortization expense	5,852	$ 3,902	14,302	$ 9,437
Tax expense (benefit) recognized	(6,592)	(4,700)	(16,654)	(11,264)
LIHTC
Summary of Investment Holdings [Line Items]
Investment, proportional amortization	93,214		93,214		84,428
Unfunded commitment, proportional amortization	54,440		54,440		55,754
Amortization expense	3,208	1,240	6,135	3,734
Tax expense (benefit) recognized	(3,582)	(1,650)	(7,398)	(4,950)
FHTC
Summary of Investment Holdings [Line Items]
Investment, equity	36,715		36,715		19,316
Unfunded commitment, equity	27,214		27,214		9,588
Amortization expense	330	215	1,178	635
Tax expense (benefit) recognized	(399)	(262)	(1,423)	(776)
NMTC
Summary of Investment Holdings [Line Items]
Investment, equity	45,637		45,637		51,912
Unfunded commitment, equity	0		0		0
Amortization expense	2,092	2,237	6,275	4,439
Tax expense (benefit) recognized	(2,611)	(2,788)	(7,833)	(5,538)
Renewable Energy
Summary of Investment Holdings [Line Items]
Investment, equity	385		385		1,099
Unfunded commitment, equity	0		0		$ 0
Amortization expense	222	210	714	629
Tax expense (benefit) recognized	$ 0	$ 0	$ 0	$ 0

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Securities Sold Under Agreements to Repurchase - Schedule of Securities Sold under Agreements to Repurchase and Related Weighted-Average Interest Rates (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Securities Sold under Agreements to Repurchase [Abstract]
Outstanding at period end	$ 279,061	$ 438,053	$ 432,804
Average amount outstanding during the period	351,362	450,966
Maximum amount outstanding at any month-end during the period	$ 430,537	$ 509,275
Weighted average interest rate during period (in percent)	0.91%	0.09%
Weighted average interest rate at end of period (in percent)	1.35%	0.40%	1.31%

XML

Securities Sold Under Agreements to Repurchase - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Securities Sold under Agreements to Repurchase [Abstract]
Securities sold under agreements to repurchase	$ 279,061	$ 432,804	$ 438,053
Weighted average interest rate at end of period (in percent)	1.35%	1.31%	0.40%
Gross outstanding balance of repurchase agreements collateralized by securities percentage (in percent)	107.00%

XML

Securities Sold Under Agreements to Repurchase - Schedule of Remaining Contractual Maturity of Secured Borrowings and Class of Collateral Pledged Under Repurchase Agreements (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	$ 279,061	$ 432,804	$ 438,053
U.S. Treasury and agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	279,061
Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	279,061
Overnight and Continuous | U.S. Treasury and agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	279,061
Up to 30 Days
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	0
Up to 30 Days | U.S. Treasury and agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	0
30-90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	0
30-90 Days | U.S. Treasury and agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	0
Greater Than 90 days
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	0
Greater Than 90 days | U.S. Treasury and agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Secured borrowings and class of collateral pledged under repurchase agreements	$ 0

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Federal Home Loan Bank Advances - Summary of FHLB Advances (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Federal Home Loan Bank, Advances [Line Items]
FHLB advances (fixed rates 0.00% to 5.61%    and variable rates 5.35% to 5.36%) maturing   December 2023 to September 2042	$ 4,450,528	$ 3,850,677
Fair value hedge basis adjustments and unamortized prepayment fees	(37,952)	(21,659)
Federal Home Loan Bank advances	$ 4,412,576	$ 3,829,018
Minimum | FHLB Advances
Federal Home Loan Bank, Advances [Line Items]
Fixed rate (in percent)	0.00%
Variable rate (in percent)	5.35%
Maximum | FHLB Advances
Federal Home Loan Bank, Advances [Line Items]
Fixed rate (in percent)	5.61%
Variable rate (in percent)	5.36%

XML

Federal Home Loan Bank Advances - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Federal Home Loan Bank, Advances [Line Items]
Weighted-average rates of FHLB advances (in percent)	3.36%	3.15%
Modifications, unamortized prepayment fees	$ 15.7	$ 20.2
FHLB Advances
Federal Home Loan Bank, Advances [Line Items]
Percentage of borrowings collateralized by investment securities and residential real estate loans (in percent)	190.00%

XML

Federal Home Loan Bank Advances - Summary of Contractual Maturities of FHLB Advances (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Federal Home Loan Banks [Abstract]
Due in 2023	$ 100,000
Due in 2024	25,243
Due in 2025	550,285
Due in 2026	100,000
Thereafter	3,675,000
Fair value hedge basis adjustments and unamortized prepayment fees	(37,952)	$ (21,659)
Federal Home Loan Bank advances	$ 4,412,576	$ 3,829,018

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Other Borrowings - Summary of Other Borrowings (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Lease liability	$ 21,595	$ 13,469
Other borrowings	863,455	743,003
Old National Bank
Debt Instrument [Line Items]
Other basis adjustments	205,106	89,588
Lease liability	21,595	13,469
Derivative collateralize position amount	204,500	88,000
Old National Bancorp
Debt Instrument [Line Items]
Other basis adjustments	$ 19,496	23,363
Senior Unsecured Notes | Old National Bancorp
Debt Instrument [Line Items]
Fixed rate (in percent)	4.125%
Senior unsecured notes (fixed rate 4.125%) maturing August 2024	$ 175,000	175,000
Unamortized debt issuance costs related to senior unsecured notes	$ (130)	(247)
Subordinated Debt | Old National Bank
Debt Instrument [Line Items]
Variable rate (in percent)	9.99%
Subordinated debentures	$ 12,000	12,000
Subordinated Debt | Old National Bancorp
Debt Instrument [Line Items]
Fixed rate (in percent)	5.875%
Subordinated debentures	$ 150,000	150,000
Junior Subordinated Debentures | Old National Bancorp
Debt Instrument [Line Items]
Junior subordinated debentures (rates of 6.95% to 9.21%) maturing July 2031 to September 2037	136,643	136,643
Notes Payable to Banks | Old National Bank
Debt Instrument [Line Items]
Leveraged loans for NMTC (fixed rates of 1.00% to 1.43%) maturing December 2046 to June 2060	$ 143,745	$ 143,187
Minimum | Junior Subordinated Debentures | Old National Bancorp
Debt Instrument [Line Items]
Variable rate (in percent)	6.95%
Minimum | Notes Payable to Banks | Old National Bank
Debt Instrument [Line Items]
Fixed rate (in percent)	1.00%
Maximum | Junior Subordinated Debentures | Old National Bancorp
Debt Instrument [Line Items]
Variable rate (in percent)	9.21%
Maximum | Notes Payable to Banks | Old National Bank
Debt Instrument [Line Items]
Fixed rate (in percent)	1.43%

XML

Other Borrowings - Contractual Maturities of Other Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Due in 2023	$ 205,160
Due in 2024	177,653
Due in 2025	14,740
Due in 2026	151,576
Due in 2027	1,636
Thereafter	292,738
Unamortized debt issuance costs and other basis adjustments	19,952
Total	$ 863,455	$ 743,003

XML

Other Borrowings - Summary of Terms of Outstanding Junior Subordinated Debentures (Details) - Trust Preferred Securities - Junior Subordinated Debentures	9 Months Ended
	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Issuance Amount	$ 136,643,000
Bridgeview Statutory Trust I
Debt Instrument [Line Items]
Issuance Amount	$ 15,464,000
Rate	9.21%
Bridgeview Statutory Trust I | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	3.58%
Bridgeview Capital Trust II
Debt Instrument [Line Items]
Issuance Amount	$ 15,464,000
Rate	8.92%
Bridgeview Capital Trust II | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	3.35%
First Midwest Capital Trust I
Debt Instrument [Line Items]
Issuance Amount	$ 37,825,000
Variable rate (in percent)	6.95%
Rate	6.95%
St. Joseph Capital Trust II
Debt Instrument [Line Items]
Issuance Amount	$ 5,155,000
Rate	7.42%
St. Joseph Capital Trust II | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.75%
Northern States Statutory Trust I
Debt Instrument [Line Items]
Issuance Amount	$ 10,310,000
Rate	7.47%
Northern States Statutory Trust I | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.80%
Anchor Capital Trust III
Debt Instrument [Line Items]
Issuance Amount	$ 5,000,000
Rate	7.21%
Anchor Capital Trust III | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.55%
Great Lakes Statutory Trust II
Debt Instrument [Line Items]
Issuance Amount	$ 6,186,000
Rate	7.07%
Great Lakes Statutory Trust II | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.40%
Home Federal Statutory    Trust I
Debt Instrument [Line Items]
Issuance Amount	$ 15,464,000
Rate	7.32%
Home Federal Statutory    Trust I | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.65%
Monroe Bancorp Capital    Trust I
Debt Instrument [Line Items]
Issuance Amount	$ 3,093,000
Rate	7.17%
Monroe Bancorp Capital    Trust I | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.60%
Tower Capital Trust 3
Debt Instrument [Line Items]
Issuance Amount	$ 9,279,000
Rate	7.36%
Tower Capital Trust 3 | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.69%
Monroe Bancorp Statutory    Trust II
Debt Instrument [Line Items]
Issuance Amount	$ 5,155,000
Rate	7.27%
Monroe Bancorp Statutory    Trust II | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.60%
Great Lakes Statutory Trust III
Debt Instrument [Line Items]
Issuance Amount	$ 8,248,000
Rate	7.37%
Great Lakes Statutory Trust III | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	1.70%

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Other Borrowings - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Feb. 15, 2022	Oct. 29, 2020
Debt Instrument [Line Items]
Other borrowings	$ 21,595	$ 13,469
Old National Bank
Debt Instrument [Line Items]
Other borrowings	21,595	13,469
Subordinated Debt | Old National Bank
Debt Instrument [Line Items]
Subordinated debentures	12,000	12,000
Subordinated Debt | Old National Bancorp
Debt Instrument [Line Items]
Subordinated debentures	$ 150,000	$ 150,000
Fixed rate (in percent)	5.875%
Anchor Bank (MN) | Subordinated Debentures | Subordinated Fixed-to-Floating Notes
Debt Instrument [Line Items]
Value of subordinated fixed-to-floating notes assumed				$ 12,000
Anchor Bank (MN) | Subordinated Debentures | Subordinated Fixed-to-Floating Notes | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate (in percent)	4.618%
First Midwest
Debt Instrument [Line Items]
Subordinated debentures			$ 150,000

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Accumulated Other Comprehensive Income (Loss) - Schedule of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	$ 5,292,095	$ 5,078,783	$ 5,128,595	$ 3,012,018
Other comprehensive income (loss) before    reclassifications	(168,206)	(245,126)	(183,958)	(814,032)
Amounts reclassified from AOCI to income	8,024	5,809	1,565	7,957
Balance at end of period	5,239,537	4,943,383	5,239,537	4,943,383
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(808,633)	(569,133)	(786,422)	(2,375)
Balance at end of period	(968,815)	(808,450)	(968,815)	(808,450)
Unrealized Gains and Losses on Available- for-Sale Debt Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(701,393)	(437,075)	(642,346)	(2,950)
Other comprehensive income (loss) before    reclassifications	(156,660)	(217,401)	(219,562)	(651,330)
Amounts reclassified from AOCI to income	178	131	4,033	(65)
Balance at end of period	(857,875)	(654,345)	(857,875)	(654,345)
Unrealized Gains and Losses on Held-to- Maturity Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(103,144)	(122,199)	(112,664)	0
Other comprehensive income (loss) before    reclassifications	0	0	1,325	(125,229)
Amounts reclassified from AOCI to income	4,193	5,121	12,388	8,151
Balance at end of period	(98,951)	(117,078)	(98,951)	(117,078)
Gains and Losses on Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(4,096)	(9,875)	(31,549)	543
Other comprehensive income (loss) before    reclassifications	(11,546)	(27,725)	34,279	(37,473)
Amounts reclassified from AOCI to income	3,653	565	(14,719)	(105)
Balance at end of period	(11,989)	(37,035)	(11,989)	(37,035)
Defined Benefit Pension Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	0	16	137	32
Other comprehensive income (loss) before    reclassifications	0	0	0	0
Amounts reclassified from AOCI to income	0	(8)	(137)	(24)
Balance at end of period	$ 0	$ 8	$ 0	$ 8

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Accumulated Other Comprehensive Income (Loss) - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Debt securities gains (losses), net	$ 241			$ 172			$ 5,440	$ (85)
Income tax (expense) benefit	(44,304)			(38,887)			(133,118)	(55,137)
Interest income (expense)	(375,086)			(376,589)			(1,138,745)	(936,846)
Salaries and employee benefits	131,541			147,203			404,715	433,167
Net income (loss)	(147,876)	$ (155,036)	$ (146,600)	(140,153)	$ (114,985)	$ 27,586	(449,512)	(227,552)
Amount Reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income (loss)	(8,024)			(5,809)			(1,565)	(7,957)
Amount Reclassified from AOCI | Unrealized gains and losses on    available-for-sale securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Debt securities gains (losses), net	(241)			(172)			(5,440)	85
Income tax (expense) benefit	63			41			1,407	(20)
Net income (loss)	(178)			(131)			(4,033)	65
Amount Reclassified from AOCI | Unrealized gains and losses on    held-to-maturity securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax (expense) benefit	1,430			1,651			4,186	2,623
Interest income (expense)	(5,623)			(6,772)			(16,574)	(10,774)
Net income (loss)	(4,193)			(5,121)			(12,388)	(8,151)
Amount Reclassified from AOCI | Gains and losses on hedges    Interest rate contracts | Interest rate contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax (expense) benefit	1,274			184			(5,174)	(34)
Interest income (expense)	(4,927)			(749)			19,893	139
Net income (loss)	(3,653)			(565)			14,719	105
Amount Reclassified from AOCI | Actuarial gains (losses)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax (expense) benefit	0			(3)			(45)	(8)
Salaries and employee benefits	0			11			182	32
Net income (loss)	$ 0			$ 8			$ 137	$ 24

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Income Taxes - Summary of Differences in Taxes from Continuing Operations Computed at Statutory Rate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Provision at statutory rate of 21%	$ 40,358	$ 37,598	$ 122,352	$ 59,365
Tax-exempt income:
Tax-exempt interest	(4,625)	(3,929)	(13,716)	(10,335)
Section 291/265 interest disallowance	675	85	1,593	150
Company-owned life insurance income	(743)	(684)	(2,315)	(2,340)
Tax-exempt income	(4,693)	(4,528)	(14,438)	(12,525)
State income taxes	8,163	7,050	24,856	7,808
Interim period effective rate adjustment	116	(31)	(607)	3,042
Tax credit investments - federal	(2,071)	(2,407)	(7,122)	(4,968)
Officer compensation limitation	1,040	401	3,120	1,053
Non-deductible FDIC premiums	1,949	1,178	6,096	2,549
Other, net	(558)	(374)	(1,139)	(1,187)
Income tax expense (benefit)	$ 44,304	$ 38,887	$ 133,118	$ 55,137
Effective tax rate	23.10%	21.70%	22.90%	19.50%

XML

Income Taxes - Additional Information (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Income Taxes [Line Items]
Net deferred tax assets	$ 480,700,000	$ 435,800,000
Valuation allowance recorded	0	0
Bad debt reserves, created for tax purposes	58,600,000
Federal
Income Taxes [Line Items]
Operating loss carryforwards	68,400,000	81,500,000
State
Income Taxes [Line Items]
Operating loss carryforwards	$ 115,600,000	$ 124,400,000

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Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Derivative [Line Items]
Percentage of periodic changes in fair value qualifies for hedge accounting treatment (in percent)	100.00%
Interest Income
Derivative [Line Items]
Reclassified interest income (expense)	$ 5,800
Interest Expense
Derivative [Line Items]
Reclassified interest income (expense)	26,300
Interest rate swaps on borrowings | Cash flow hedges | Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	150,000	$ 150,000
Interest rate swaps on borrowings | Fair value hedges | Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	700,000	300,000
Interest rate collars and floors on loan pools | Cash flow hedges | Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	1,500,000	1,900,000
Interest rate swaps on investment securities | Fair value hedges | Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	998,107	909,957
Interest rate lock commitments | Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	42,492	21,401
Forward mortgage loan contracts | Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	54,730	30,330
Counterparty interest rate swaps | Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	5,775,634	5,220,363
Customer interest rate swaps | Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	$ 5,775,638	$ 5,220,363

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Derivative Financial Instruments - Summary of Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Designated as Hedging Instrument
Derivative [Line Items]
Assets	$ 2,214	$ 11,764
Liabilities	27,749	47,859
Designated as Hedging Instrument | Cash flow hedges | Interest rate collars and floors on loan pools
Derivative [Line Items]
Notional	1,500,000	1,900,000
Assets	2,214	11,764
Liabilities	27,749	47,859
Designated as Hedging Instrument | Cash flow hedges | Interest rate swaps on borrowings
Derivative [Line Items]
Notional	150,000	150,000
Assets	0	0
Liabilities	0	0
Designated as Hedging Instrument | Fair value hedges | Interest rate swaps on borrowings
Derivative [Line Items]
Notional	700,000	300,000
Assets	0	0
Liabilities	0	0
Designated as Hedging Instrument | Fair value hedges | Interest rate swaps on investment securities
Derivative [Line Items]
Notional	998,107	909,957
Assets	0	0
Liabilities	0	0
Not Designated as Hedging Instrument
Derivative [Line Items]
Assets	225,619	157,237
Liabilities	381,520	332,845
Not Designated as Hedging Instrument | Interest rate lock commitments
Derivative [Line Items]
Notional	42,492	21,401
Assets	0	93
Liabilities	146	0
Not Designated as Hedging Instrument | Forward mortgage loan contracts
Derivative [Line Items]
Notional	54,730	30,330
Assets	1,031	32
Liabilities	0	0
Not Designated as Hedging Instrument | Customer interest rate swaps
Derivative [Line Items]
Notional	5,775,638	5,220,363
Assets	1,208	5,676
Liabilities	379,864	326,924
Not Designated as Hedging Instrument | Counterparty interest rate swaps
Derivative [Line Items]
Notional	5,775,634	5,220,363
Assets	222,907	151,111
Liabilities	1,213	5,711
Not Designated as Hedging Instrument | Customer foreign currency contracts
Derivative [Line Items]
Notional	13,234	8,341
Assets	218	253
Liabilities	156	42
Not Designated as Hedging Instrument | Counterparty foreign currency contracts
Derivative [Line Items]
Notional	12,970	8,297
Assets	255	72
Liabilities	$ 141	$ 168

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Derivative Financial Instruments - Schedule of Effect of Derivative Instruments on the Consolidated Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income on Derivative	$ (15,574)	$ (36,755)	$ 45,547	$ (49,679)
Gain (Loss) Reclassified from AOCI into Income	(4,927)	(749)	19,893	139
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	814	821	1,869	436
Fair value hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	35,984	47,431	(11,232)	151,508
Gain (Loss) Recognized in Income on Related Hedged Items	(36,489)	(47,337)	10,632	(151,574)
Interest rate swaps on borrowings | Fair value hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	(9,553)	(532)	(18,500)	(7,889)
Gain (Loss) Recognized in Income on Related Hedged Items	9,566	638	18,303	8,193
Interest rate swaps on investment securities | Fair value hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	45,537	47,963	7,268	159,397
Gain (Loss) Recognized in Income on Related Hedged Items	(46,055)	(47,975)	(7,671)	(159,767)
Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income on Derivative	(15,574)	(36,755)	4,302	(49,679)
Gain (Loss) Reclassified from AOCI into Income	(5,960)	(749)	17,481	139
Interest rate contracts | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	426	108	1,125	1,058
Mortgage contracts | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	391	638	760	(735)
Foreign currency contracts | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income on Derivative	$ (3)	$ 75	$ (16)	$ 113

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Commitments, Contingencies, and Financial Guarantees - Additional Information (Details)	9 Months Ended
	Sep. 30, 2023 USD ($) shares	Dec. 31, 2022 USD ($)
Loss Contingencies [Line Items]
Term of standby letters of credit, years	1 year
Percent of unfunded loan commitments with fixed rates (in percent)	4.00%
Loan commitments floating rate, minimum (in percent)	0.00%
Loan commitments floating rate, maximum (in percent)	23.00%
Allowance for unfunded loan commitments	$ 33,000,000	$ 32,200,000
Class B Restricted Shares | Visa
Loss Contingencies [Line Items]
Restricted stock conversion ratio	1.5875
Investment owned, balance, shares (in shares) | shares	65,466
Investment owned, at cost	$ 0
Interest Rate Swap
Loss Contingencies [Line Items]
Notional amount	$ 522,500,000	$ 398,900,000

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Commitments, Contingencies, and Financial Guarantees - Loan Commitments and Standby Letters of Credit (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Unfunded loan commitments	$ 9,142,538	$ 8,979,334
Standby letters of credit	184,027	174,070
Carrying value of letters of credit	$ 1,200	$ 800

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Fair Value - Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities	$ 69,880	$ 52,507
Investment securities available for sale	6,414,761	6,773,712
U.S. Treasury
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	548,126	200,927
U.S. government-sponsored entities and agencies
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	1,142,900	1,175,080
Mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	3,862,705	4,369,902
States and political subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	544,944	663,852
Pooled trust preferred securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	11,125	10,811
Other securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	304,961	353,140
Fair Value on Recurring Basis | Carrying Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities	69,880	52,507
Loans held-for-sale	122,033	11,926
Derivative assets	227,833	169,001
Derivative liabilities	409,269	380,704
Fair Value on Recurring Basis | Carrying Value | U.S. Treasury
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	548,126	200,927
Fair Value on Recurring Basis | Carrying Value | U.S. government-sponsored entities and agencies
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	1,142,900	1,175,080
Fair Value on Recurring Basis | Carrying Value | Mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	3,862,705	4,369,902
Fair Value on Recurring Basis | Carrying Value | States and political subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	544,944	663,852
Fair Value on Recurring Basis | Carrying Value | Pooled trust preferred securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	11,125	10,811
Fair Value on Recurring Basis | Carrying Value | Other securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	304,961	353,140
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities	69,880	52,507
Loans held-for-sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities	0	0
Loans held-for-sale	122,033	11,926
Derivative assets	227,833	169,001
Derivative liabilities	409,269	380,704
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities	0	0
Loans held-for-sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | U.S. Treasury | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	548,126	200,927
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | U.S. Treasury | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | U.S. Treasury | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | U.S. government-sponsored entities and agencies | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | U.S. government-sponsored entities and agencies | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	1,142,900	1,175,080
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | U.S. government-sponsored entities and agencies | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Mortgage-backed securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Mortgage-backed securities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	3,862,705	4,369,902
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Mortgage-backed securities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | States and political subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | States and political subdivisions | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	544,944	663,852
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | States and political subdivisions | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Pooled trust preferred securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Pooled trust preferred securities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	11,125	10,811
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Pooled trust preferred securities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Other securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	0	0
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Other securities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	304,961	353,140
Fair Value on Recurring Basis | Estimate of Fair Value Measurement | Other securities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investment securities available for sale	$ 0	$ 0

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Fair Value - Assets Measured at Fair Value on a Non-Recurring Basis (Details) - Fair Value on Non-recurring Basis - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commercial Foreclosed Assets | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	$ 1,879
Commercial Foreclosed Assets | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	0
Commercial Foreclosed Assets | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	0
Commercial Foreclosed Assets | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	1,879
Commercial | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	10,783	$ 22,562
Commercial | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	0	0
Commercial | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	0	0
Commercial | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	10,783	22,562
Commercial real estate | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	75,720	48,026
Commercial real estate | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	0	0
Commercial real estate | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	0	0
Commercial real estate | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	$ 75,720	$ 48,026

XML

Fair Value - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Allowance for credit losses	$ 303,982,000	$ 302,254,000	$ 303,982,000	$ 302,254,000	$ 300,555,000	$ 303,671,000	$ 288,003,000	$ 107,341,000
Provision for credit losses	19,068,000	15,490,000	47,292,000	133,391,000
Other real estate owned property write-downs	26,000	200,000	100,000	600,000
Valuation allowance for loan servicing rights with impairments	0		0
Valuation allowance for loan servicing rights with impairments, impairments (recoveries) during period	0	0	$ 0	0
Past due period of mortgage loans held for sale			90 days
Interest income for residential loans held for sale	400,000	400,000	$ 900,000	1,600,000
Fair Value on Non-recurring Basis
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Other real estate	1,900,000		1,900,000
Impaired Commercial and Commercial Real Estate Loans
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Principal amount of impaired commercial and commercial real estate loans	117,500,000		117,500,000			92,000,000
Allowance for credit losses	31,000,000		31,000,000			$ 21,500,000
Provision for credit losses	$ 2,100,000	$ 7,300,000	$ 21,900,000	$ 20,100,000

XML

Fair Value - Quantitative Information about Significant Unobservable Inputs Used in Fair Value Measurements (Details) - Significant Unobservable Inputs (Level 3) $ in Thousands	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Collateral Dependent Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 10,783	$ 22,562
Collateral Dependent Loans | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 75,720	$ 48,026
Collateral Dependent Loans | Minimum | Discount for type of property, age of appraisal, and current status | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.10	0.10
Collateral Dependent Loans | Minimum | Discount for type of property, age of appraisal, and current status | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.01	0.01
Collateral Dependent Loans | Maximum | Discount for type of property, age of appraisal, and current status | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.40	0.47
Collateral Dependent Loans | Maximum | Discount for type of property, age of appraisal, and current status | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.38	0.26
Collateral Dependent Loans | Weighted Average | Discount for type of property, age of appraisal, and current status | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.33	0.28
Collateral Dependent Loans | Weighted Average | Discount for type of property, age of appraisal, and current status | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.17	0.11
Foreclosed Assets | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 1,879
Foreclosed Assets | Minimum | Discount for type of property, age of appraisal, and current status | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.04
Foreclosed Assets | Maximum | Discount for type of property, age of appraisal, and current status | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.17
Foreclosed Assets | Weighted Average | Discount for type of property, age of appraisal, and current status | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unobservable Input	0.06

XML

Fair Value - Schedule of Difference between the Aggregate Fair Value and the Aggregate Remaining Principal Balance (Details) - Loans held-for-sale - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate Fair Value	$ 122,033	$ 11,926
Difference	72	221
Contractual Principal	$ 121,961	$ 11,705

XML

Fair Value - Changes in Fair Value for Items Measured at Fair Value Pursuant to Election of the Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Trading Securities and Other Trading Assets [Line Items]
Interest Income	$ 375,086	$ 376,589	$ 1,138,745	$ 936,846
Interest (Expense)	(201,433)	(29,929)	(478,325)	(59,535)
Loans held-for-sale
Schedule of Trading Securities and Other Trading Assets [Line Items]
Other Gains and (Losses)	(327)	(710)	(151)	(1,775)
Interest Income	12	1	2	7
Interest (Expense)	0	0	0	0
Total Changes in Fair Values Included in Current Period Earnings	$ (315)	$ (709)	$ (149)	$ (1,768)

XML

Fair Value - Carrying Amounts and Estimated Fair Values of Financial Instruments, Not Carried at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash, due from banks, money market,    and other interest-earning investments	$ 1,663,430	$ 728,412
Loans, net	32,273,852	30,819,970
Accrued interest receivable	209,503	190,521
Noninterest-bearing demand deposits	10,091,352	11,930,798
Time deposits	5,575,704	3,013,780
Federal funds purchased and interbank borrowings	918	581,489
Securities sold under agreements to repurchase	279,061	432,804	$ 438,053
Federal Home Loan Bank advances	4,412,576	3,829,018
Other borrowings	863,455	743,003
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		0
Significant Other Observable Inputs (Level 2) | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		656,358
Significant Other Observable Inputs (Level 2) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		982,963
Significant Other Observable Inputs (Level 2) | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		1,004,361
Significant Unobservable Inputs (Level 3) | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		0
Significant Unobservable Inputs (Level 3) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		0
Significant Unobservable Inputs (Level 3) | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity		0
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash, due from banks, money market,    and other interest-earning investments	1,663,430	728,412
Accrued interest receivable	209,503	190,521
Noninterest-bearing demand deposits	10,091,352	11,930,798
Checking, NOW, savings, and money market    interest-bearing deposits	21,585,620	20,056,252
Time deposits	5,575,704	3,013,780
Federal funds purchased and interbank borrowings	918	581,489
Securities sold under agreements to repurchase	279,061	432,804
Federal Home Loan Bank advances	4,412,576	3,829,018
Other borrowings	863,455	743,003
Accrued interest payable	46,934	19,547
Standby letters of credit	1,224	755
Commitments to extend credit	0	0
Carrying Value | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	824,223	819,168
Carrying Value | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	1,043,585	1,106,817
Carrying Value | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	1,160,106	1,163,162
Carrying Value | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	9,207,028	9,386,862
Carrying Value | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	13,770,202	12,317,825
Carrying Value | Residential real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	6,675,508	6,438,525
Carrying Value | Consumer credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	2,621,114	2,676,758
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash, due from banks, money market,    and other interest-earning investments	1,663,430	728,412
Accrued interest receivable	1,093	758
Noninterest-bearing demand deposits	10,091,352	11,930,798
Checking, NOW, savings, and money market    interest-bearing deposits	21,585,620	20,056,252
Time deposits	0	0
Federal funds purchased and interbank borrowings	918	581,489
Securities sold under agreements to repurchase	279,061	432,804
Federal Home Loan Bank advances	0	0
Other borrowings	0	0
Accrued interest payable	0	0
Standby letters of credit	0	0
Commitments to extend credit	0	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Consumer credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash, due from banks, money market,    and other interest-earning investments	0	0
Accrued interest receivable	45,597	52,081
Noninterest-bearing demand deposits	0	0
Checking, NOW, savings, and money market    interest-bearing deposits	0	0
Time deposits	5,527,361	2,976,389
Federal funds purchased and interbank borrowings	0	0
Securities sold under agreements to repurchase	0	0
Federal Home Loan Bank advances	4,167,911	3,739,780
Other borrowings	843,629	703,156
Accrued interest payable	46,934	19,547
Standby letters of credit	0	0
Commitments to extend credit	0	0
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	617,010
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	847,652
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	928,959
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Residential real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Consumer credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash, due from banks, money market,    and other interest-earning investments	0	0
Accrued interest receivable	162,813	137,682
Noninterest-bearing demand deposits	0	0
Checking, NOW, savings, and money market    interest-bearing deposits	0	0
Time deposits	0	0
Federal funds purchased and interbank borrowings	0	0
Securities sold under agreements to repurchase	0	0
Federal Home Loan Bank advances	0	0
Other borrowings	0	0
Accrued interest payable	0	0
Standby letters of credit	1,224	755
Commitments to extend credit	3,582	3,666
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | U.S. government-sponsored entities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	0
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	0
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | States and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities held to maturity	0
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	9,078,129	9,066,583
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | Commercial real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	13,302,502	11,867,851
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | Residential real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	5,630,855	5,372,491
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | Consumer credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	$ 2,526,277	$ 2,557,115