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Acquisition and Divestiture Activity | 6 Months Ended
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Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisition and Divestiture Activity | ACQUISITION AND DIVESTITURE ACTIVITY Acquisitions Bremer Financial Corporation On May 1, 2025, Old National completed its acquisition of Bremer Financial Corporation (“Bremer”) and its wholly owned subsidiary, Bremer Bank, National Association. Pursuant to the terms of the merger agreement, each outstanding share of Bremer common stock was converted into the right to receive (i) $26.22 in cash without interest, (ii) 4.182 shares of Old National common stock and (iii) cash in lieu of fractional shares. In addition, on November 25, 2024, Old National announced that it entered into a forward sale agreement with Citibank, N.A. (the “Forward Purchaser”) to issue 19,047,619 shares of Old National common stock for an aggregate offering amount of $400.0 million and entered into an underwriting agreement with Citigroup Global Markets Inc., as representative for the underwriters named therein (collectively, the “Underwriters”) and as forward seller (the “Forward Seller”), and the Forward Purchaser. The Underwriters were also granted a 30-day option to purchase up to an additional 2,857,143 shares of Old National common stock. On November 25, 2024, the Underwriters exercised this option in full, upon which Old National entered into an additional forward sale agreement to issue 2,857,143 shares of Old National common stock. Old National physically settled in full the forward sale agreements on May 23, 2025 by delivering 21,904,762 shares of Old National common stock to the Forward Purchaser. Old National received net proceeds from such sale of shares of Old National common stock and full physical settlement of the forward sale agreements of $443.2 million. The assets acquired and liabilities assumed, both intangible and tangible, were recorded at their estimated fair values as of the merger date and have been accounted for under the acquisition method of accounting. The following table presents the preliminary valuation of the assets acquired and liabilities assumed and the fair value of consideration as of the merger date:
(dollars and shares in thousands) | May 1, 2025
Assets |
Cash and cash equivalents | $ | 511,157 |
Equity securities | 26,070 |
Investment securities | 2,811,133 |
FHLB/Federal Reserve Bank stock | 93,924 |
Loans held-for-sale | 9,883 |
Loans, net of allowance for credit losses | 11,123,355 |
Premises and equipment | 100,489 |
Goodwill | 234,635 |
Other intangible assets | 440,099 |
Company-owned life insurance | 181,909 |
Other assets | 770,925 |
Total assets | $ | 16,303,579 |
Liabilities |
Deposits | $ | 12,880,842 |
Securities sold under agreements to repurchase | 49,131 |
Federal Home Loan Bank advances | 1,559,227 |
Other borrowings | 193,279 |
Accrued expenses and other liabilities | 273,205 |
Total liabilities | $ | 14,955,684 |
Fair value of consideration |
Common stock (50,183 shares issued at $20.67 per share) | $ | 1,033,262 |
Cash | 314,633 |
Total consideration | $ | 1,347,895 |
Goodwill related to this merger will not be deductible for tax purposes. Other intangible assets acquired included core deposit intangibles and customer relationship intangibles. The estimated fair value of the core deposit intangible was $397.1 million and is being amortized over an estimated useful life of 10 years. The estimated fair value of the customer relationship intangibles was $43.0 million and is being amortized over an estimated useful life of 12 years. The fair value of purchased credit deteriorated (“PCD”) assets was $1.9 billion on the date of merger. The gross contractual amounts receivable relating to the PCD assets was $2.1 billion. Old National estimates, on the date of the merger, that $90.4 million of the contractual cash flows specific to the PCD assets will not be collected. Merger-related costs associated with the Bremer acquisition have been expensed for the three and six months ended June 30, 2025 totaling $40.2 million and $40.9 million, respectively, and additional merger-related and integration costs will be expensed in future periods as incurred. As a result of the acquisition, Old National assumed sponsorship of Bremer’s defined benefit pension plan under which both plan participation and benefit accruals were frozen subsequent to the acquisition. The net pension asset associated with Bremer’s defined benefit pension plan is recorded in other assets on the consolidated balance sheet. Pension costs were not material in the three and six months ended June 30, 2025. The Company’s results of operations for the three and six months ended June 30, 2025 include the operating results of the acquired assets and assumed liabilities of Bremer subsequent to the acquisition on May 1, 2025. Due to the integration of certain Bremer systems and processes since the acquisition date, the Company has determined that it is impractical to report the amounts of revenue and income before income taxes of legacy Bremer subsequent to acquisition. Summary of Unaudited Pro-Forma Financial Information The following table presents supplemental unaudited pro-forma financial information as if the Bremer merger had occurred on January 1, 2024. The pro-forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effective as of this assumed date.
| Three Months Ended June 30, |  | Six Months Ended June 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Total revenues (1) | $ | 694,351 |  |  | $ | 660,328 |  |  | $ | 1,363,086 |  |  | $ | 1,295,485 |
Income before income taxes | 229,090 |  |  | 180,291 |  |  | 482,014 |  |  | 339,091 |
(1) Includes net interest income and total noninterest income. Supplemental pro-forma earnings for the three months ended June 30, 2025 were adjusted to exclude $40.2 million of merger-related costs, $6.5 million of provision for credit losses on unfunded loan commitments, and $69.1 million of provision for credit losses to establish an allowance for credit losses on non-PCD loans acquired as well as a $21.0 million gain associated with the freezing of benefits of the Bremer pension plan. Supplemental pro-forma earnings for the three months ended June 30, 2024 were adjusted to include merger-related costs. Supplemental pro-forma earnings for the six months ended June 30, 2025 were adjusted to exclude $40.9 million of merger-related costs, $6.5 million of provision for credit losses on unfunded loan commitments, and $69.1 million of provision for credit losses to establish an allowance for credit losses on non-PCD loans acquired as well as a $21.0 million gain associated with the freezing of benefits of the Bremer pension plan. Supplemental pro-forma earnings for the six months ended June 30, 2024 were adjusted to include these costs. CapStar Financial Holdings, Inc. On April 1, 2024, Old National completed its acquisition of CapStar Financial Holdings, Inc. (“CapStar”) and its wholly owned subsidiary, CapStar Bank, in an all-stock transaction. This partnership strengthens Old National’s Nashville, Tennessee presence and adds several new high-growth markets. As of March 31, 2025, Old National finalized its valuation of all assets acquired and liabilities assumed. The following table presents a summary of the assets acquired and liabilities assumed, net of the fair value adjustments and the fair value of consideration as of the merger date:
(dollars and shares in thousands) | April 1, 2024
Assets |
Cash and cash equivalents | $ | 177,791 |
Investment securities | 342,490 |
FHLB/Federal Reserve Bank stock | 14,426 |
Loans held-for-sale | 21,159 |
Loans, net of allowance for credit losses | 2,120,627 |
Premises and equipment | 22,481 |
Goodwill | 176,535 |
Other intangible assets | 46,125 |
Company-owned life insurance | 91,475 |
Other assets | 95,922 |
Total assets | $ | 3,109,031 |
Liabilities |
Deposits | $ | 2,560,124 |
Federal Home Loan Bank advances | 75,000 |
Other borrowings | 30,000 |
Accrued expenses and other liabilities | 26,309 |
Total liabilities | $ | 2,691,433 |
Fair value of consideration |
Common stock (24,014 shares issued at $17.41 per share) | $ | 417,598 |
Total consideration | $ | 417,598 |
Goodwill related to this merger will not be deductible for tax purposes. Other intangible assets acquired included core deposit intangibles. The estimated fair value of the core deposit intangible was $46.1 million and is being amortized over an estimated useful life of 10 years. The fair value of PCD assets was $610.7 million on the date of merger. The gross contractual amounts receivable relating to the PCD assets was $679.3 million. Old National estimates, on the date of the merger, that $26.7 million of the contractual cash flows specific to the PCD assets will not be collected. Merger-related costs primarily associated with the CapStar acquisition totaling $1.0 million and $1.3 million, respectively, have been expensed for the three and six months ended June 30, 2025 compared to $19.4 million and $22.3 million, respectively, for the three and six months ended June 30, 2024. Additional merger-related and integration costs will be expensed in future periods as incurred.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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