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Investment Securities
 12 Months Ended
Dec. 31, 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
December 31, 2023
Available-for-Sale
U.S. Treasury$449,817 $154 $(11,941)$(41,297)$396,733 
U.S. government-sponsored entities and agencies1,487,879 33 (192,717)(63,931)1,231,264 
Mortgage-backed securities - Agency4,835,319 3,093 (621,852)— 4,216,560 
States and political subdivisions554,509 878 (23,057)2,930 535,260 
Pooled trust preferred securities13,797 — (2,460)— 11,337 
Other securities343,568 449 (22,116)— 321,901 
Total available-for-sale securities$7,684,889 $4,607 $(874,143)$(102,298)$6,713,055 
Held-to-Maturity
U.S. government-sponsored entities and agencies$825,953 $— $(154,827)$— $671,126 
Mortgage-backed securities - Agency1,029,131 — (147,137)— 881,994 
States and political subdivisions1,158,559 1,800 (112,141)— 1,048,218 
Allowance for securities held-to-maturity(150)— — — (150)
Total held-to-maturity securities$3,013,493 $1,800 $(414,105)$— $2,601,188 
December 31, 2022
Available-for-Sale
U.S. Treasury$253,148 $5 $(5,189)$(47,037)$200,927 
U.S. government-sponsored entities and agencies1,451,736 — (169,248)(107,408)1,175,080 
Mortgage-backed securities - Agency4,986,354 976 (617,428)— 4,369,902 
States and political subdivisions688,159 1,789 (26,096)— 663,852 
Pooled trust preferred securities13,783 — (2,972)— 10,811 
Other securities379,423 258 (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 - Agency1,106,817 — (123,854)— 982,963 
States and political subdivisions1,163,312 221 (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 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 19 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:
Years Ended December 31,
(dollars in thousands)202320222021
Proceeds$154,339 $90,840 $357,704 
Realized gains1,006 531 4,505 
Realized losses(7,271)(619)(178)
Investment securities pledged to secure public and other funds had a carrying value of $8.4 billion at December 31, 2023 and $6.1 billion at December 31, 2022.
At December 31, 2023, Old National had a concentration of investment securities issued by Indiana and its political subdivisions. The only aggregate market value of the Company’s investment securities greater than 10% of shareholders’ equity were issued by Indiana and its political subdivisions totaling $600.9 million, which represented 10.8% of shareholders’ equity. Of the bonds issued by Indiana, 99.6% are rated “BBB+” or better, and the remaining 0.4% generally represent pre-refunded positions.
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.
At December 31, 2023
(dollars in thousands)Amortized
Cost		Fair
Value		Weighted
Average
Yield
Maturity
Available-for-Sale
Within one year$378,992 $375,976 4.37 %
One to five years1,875,152 1,736,452 3.14 %
Five to ten years3,944,940 3,408,082 2.39 %
Beyond ten years1,485,805 1,192,545 2.60 %
Total$7,684,889 $6,713,055 2.71 %
Held-to-Maturity
One to five years$161,440 $134,333 2.65 %
Five to ten years1,183,893 1,040,925 2.66 %
Beyond ten years1,668,160 1,425,930 2.72 %
Total$3,013,493 $2,601,188 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 months12 months or longerTotal
(dollars in thousands)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized Losses
December 31, 2023
Available-for-Sale
U.S. Treasury$8,937 $(42)$191,027 $(11,899)$199,964 $(11,941)
U.S. government-sponsored entities
   and agencies		— — 1,189,314 (192,717)1,189,314 (192,717)
Mortgage-backed securities - Agency90,145 (710)3,835,552 (621,142)3,925,697 (621,852)
States and political subdivisions86,865 (495)259,767 (22,562)346,632 (23,057)
Pooled trust preferred securities— — 11,337 (2,460)11,337 (2,460)
Other securities39,032 (229)255,888 (21,887)294,920 (22,116)
Total available-for-sale$224,979 $(1,476)$5,742,885 $(872,667)$5,967,864 $(874,143)
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 - Agency3,207,319 (358,507)1,116,205 (258,921)4,323,524 (617,428)
States and political subdivisions414,813 (25,555)2,703 (541)417,516 (26,096)
Pooled trust preferred securities— — 10,811 (2,972)10,811 (2,972)
Other securities257,775 (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 months12 months or longerTotal
(dollars in thousands)Fair
Value		Unrecognized
Losses		Fair
Value		Unrecognized
Losses		Fair
Value		Unrecognized
Losses
December 31, 2023
Held-to-Maturity
U.S. government-sponsored entities
   and agencies		$— $— $671,126 $(154,827)$671,126 $(154,827)
Mortgage-backed securities - Agency— — 881,994 (147,137)881,994 (147,137)
States and political subdivisions— — 977,154 (112,141)977,154 (112,141)
Total held-to-maturity$— $— $2,530,274 $(414,105)$2,530,274 $(414,105)
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 - Agency367,849 (42,438)615,114 (81,416)982,963 (123,854)
States and political subdivisions838,689 (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-for-maturity totaling $127.6 million at December 31, 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 for available-for-sale debt securities was needed at December 31, 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 December 31, 2023 and December 31, 2022. Accrued interest receivable on securities portfolio is excluded from the estimate of credit losses and totaled $50.3 million at December 31, 2023 and $50.9 million at December 31, 2022.
At December 31, 2023, Old National’s securities portfolio consisted of 2,920 securities, 2,588 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 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 December 31, 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 pooled trust preferred securities have experienced credit defaults. However, we believe that the value of the instruments lies in the full and timely interest payments that will be received through maturity, the steady amortization that will be experienced until maturity, and the full return of principal by the final maturity of the collateralized debt obligations. Old National did not recognize any losses on these securities for the years ended December 31, 2023 or December 31, 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 $80.4 million at December 31, 2023 and $52.5 million at December 31, 2022. There were gains on equity securities of $21.5 million during 2023, losses on equity securities of $4.9 million during 2022, and gains on equity securities of $0.2 million during 2021.
Alternative Investments
Old National has alternative investments without readily determinable fair values that are included in other assets totaling $449.3 million at December 31, 2023, consisting of $252.2 million of illiquid investments of partnerships, limited liability companies, and other ownership interests that support affordable housing and $197.1 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 were no impairments or adjustments on equity securities without readily determinable fair values, except for amortization of tax credit investments during 2023, 2022, and 2021.