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Fair Value
 9 Months Ended
Sep. 30, 2024
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, 2024 Using
(dollars in thousands)Carrying ValueQuoted Prices in
Active Markets for
Identical Assets (Level 1)		Significant
Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs
(Level 3)
Financial Assets    
Equity securities$89,249 $89,249 $— $— 
Investment securities available-for-sale:
U.S. Treasury210,278 210,278 — — 
U.S. government-sponsored entities and agencies1,294,278 — 1,294,278 — 
Mortgage-backed securities - Agency5,101,056 — 5,101,056 — 
States and political subdivisions511,565 — 511,565 — 
Pooled trust preferred securities11,157 — 11,157 — 
Other securities304,106 — 304,106 — 
Loans held-for-sale62,376 — 62,376 — 
Derivative assets163,586 — 163,586 — 
Financial Liabilities
Derivative liabilities212,042 — 212,042 — 
  Fair Value Measurements at December 31, 2023 Using
(dollars in thousands)Carrying ValueQuoted Prices in
Active Markets for
Identical Assets (Level 1)		Significant
Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs
(Level 3)
Financial Assets    
Equity securities$80,372 $80,372 $— $— 
Investment securities available-for-sale:
U.S. Treasury396,733 396,733 — — 
U.S. government-sponsored entities and agencies1,231,264 — 1,231,264 — 
Mortgage-backed securities - Agency4,216,560 — 4,216,560 — 
States and political subdivisions535,260 — 535,260 — 
Pooled trust preferred securities11,337 — 11,337 — 
Other securities321,901 — 321,901 — 
Loans held-for-sale32,006 — 32,006 — 
Derivative assets166,302 — 166,302 — 
Financial Liabilities
Derivative liabilities268,916 — 268,916 — 
Non-Recurring Basis
Assets measured at fair value at September 30, 2024 on a non-recurring basis are summarized below:
  Fair Value Measurements at September 30, 2024 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$32,051 $— $— $32,051 
Commercial real estate loans147,158 — — 147,158 
Foreclosed Assets:
Commercial1,075 — — 1,075 
Residential244 — — 244 
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 $228.8 million, with a valuation allowance of $49.6 million at September 30, 2024. Old National recorded provision expense associated with these loans totaling $19.4 million and $33.2 million for the three and nine months ended September 30, 2024, respectively, compared to $2.1 million and $21.9 million for the three and nine months ended September 30, 2023, 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 $1.3 million at September 30, 2024. There were write-downs on other real estate owned totaling $0.1 million and $0.5 million for the three and nine months ended September 30, 2024, respectively, compared to $26 thousand and $0.1 million for the three and nine months ended September 30, 2023, respectively.
Assets measured at fair value at December 31, 2023 on a non-recurring basis are summarized below:
  Fair Value Measurements at December 31, 2023 Using
(dollars in thousands)Carrying ValueQuoted 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$11,017 $— $— $11,017 
Commercial real estate loans95,457 — — 95,457 
Foreclosed Assets:
Commercial real estate1,669 — — 1,669 
At December 31, 2023, commercial and commercial real estate loans that are deemed collateral dependent had a principal amount of $134.3 million, with a valuation allowance of $27.9 million. Net carrying amount of other real estate owned and other repossessed property totaled $1.7 million at December 31, 2023.
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 ValueValuation TechniquesUnobservable Input
Range (Weighted Average) (1)
September 30, 2024    
Collateral Dependent Loans    
Commercial loans$32,051 DiscountedDiscount for type of property,
9% - 50% (26%)
 cash flowage of appraisal, and current status
Commercial real estate loans147,158 DiscountedDiscount for type of property,
0% - 32% (15%)
cash flowage of appraisal, and current status
Foreclosed Assets
Commercial real estate1,075 Fair value ofDiscount for type of property,
28% - 56% (32%)
collateralage of appraisal, and current status
Residential (2)
244 Fair value ofDiscount for type of property,
24%
collateralage of appraisal, and current status
December 31, 2023  
Collateral Dependent Loans  
Commercial loans$11,017 DiscountedDiscount for type of property,
5% - 37% (27%)
 cash flowage of appraisal, and current status
Commercial real estate loans95,457 DiscountedDiscount for type of property,
2% - 38% (16%)
 cash flowage of appraisal, and current status
Foreclosed Assets  
Commercial real estate1,669 Fair value ofDiscount for type of property,
4% - 8% (4%)
collateralage of appraisal, and current status
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
(2)There was only one foreclosed residential real estate property at September 30, 2024 with write-downs during the nine months ended September 30, 2024, so no range or weighted average is reported.
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 $0.7 million for three months ended September 30, 2024 and $1.5 million for the nine months ended September 30, 2024, compared to $0.4 million and $0.9 million for the three and nine months ended September 30, 2023, 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, 2024   
Loans held-for-sale$62,376 $1,343 $61,033 
December 31, 2023
Loans held-for-sale$32,006 $621 $31,385 
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 IncomeInterest (Expense)Total Changes
in Fair Values
Included in
Current Period Earnings
Three Months Ended September 30, 2024    
Loans held-for-sale$809 $7 $— $816 
Three Months Ended September 30, 2023
Loans held-for-sale$(327)$12 $— $(315)
Nine Months Ended September 30, 2024
Loans held-for-sale$712 $13 $(5)$720 
Nine Months Ended September 30, 2023
Loans held-for-sale$(151)$2 $— $(149)
Financial Instruments Not Carried at Fair Value
The carrying amounts and estimated fair values of financial instruments not carried at fair value were as follows: 
  Fair Value Measurements at September 30, 2024 Using
(dollars in thousands)Carrying ValueQuoted 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		$1,191,570 $1,191,570 $— $— 
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies831,160 — 700,473 — 
Mortgage-backed securities - Agency984,770 — 854,316 — 
State and political subdivisions1,153,413 — 1,049,266 — 
Loans, net:
Commercial10,269,767 — — 10,126,433 
Commercial real estate16,150,111 — — 15,781,629 
Residential real estate6,736,408 — — 6,170,208 
Consumer credit2,863,517 — — 2,888,346 
Accrued interest receivable225,624 1,161 49,628 174,835 
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits$9,429,285 $9,429,285 $— $— 
Checking, NOW, savings, and money market
   interest-bearing deposits		24,260,467 24,260,467 — — 
Time deposits7,155,994 — 7,112,642 — 
Federal funds purchased and interbank borrowings135,263 135,263 — — 
Securities sold under agreements to repurchase244,626 244,626 — — 
FHLB advances4,471,153 — 4,502,601 — 
Other borrowings598,054 — 599,539 — 
Accrued interest payable65,836 — 65,836 — 
Standby letters of credit1,727 — — 1,727 
Off-Balance Sheet Financial Instruments
Commitments to extend credit$— $— $— $4,105 
  Fair Value Measurements at December 31, 2023 Using
(dollars in thousands)Carrying ValueQuoted 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		$1,175,058 $1,175,058 $— $— 
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies825,953 — 671,126 — 
Mortgage-backed securities - Agency1,029,131 — 881,994 — 
State and political subdivisions1,158,409 — 1,048,068 — 
Loans, net:
Commercial9,392,267 — — 9,258,193 
Commercial real estate13,984,273 — — 13,640,868 
Residential real estate6,678,606 — — 5,579,999 
Consumer credit2,629,171 — — 2,555,121 
Accrued interest receivable225,159 859 54,465 169,835 
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits$9,664,247 $9,664,247 $— $— 
Checking, NOW, savings, and money market
   interest-bearing deposits		21,991,789 21,991,789 — — 
Time deposits5,579,144 — 5,552,538 — 
Federal funds purchased and interbank borrowings390 390 —— 
Securities sold under agreements to repurchase285,206 285,206 —— 
FHLB advances4,280,681 — 4,090,954 — 
Other borrowings764,870 — 755,592 — 
Accrued interest payable57,094 — 57,094 — 
Standby letters of credit1,318 — — 1,318 
Off-Balance Sheet Financial Instruments
Commitments to extend credit$— $— $— $3,839 
The methods utilized to measure the fair value of financial instruments at September 30, 2024 and December 31, 2023 represent an approximation of exit price, however, an actual exit price may differ.