v3.26.3
FAIR VALUE
 9 Months Ended
Sep. 30, 2026
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, 2026 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$132,263 $132,263 $— $— 
Investment securities available-for-sale:
U.S. Treasury191,586 191,586 — — 
U.S. government-sponsored entities and agencies1,294,105 — 1,294,105 — 
Mortgage-backed securities - Agency9,415,911 — 9,415,911 — 
States and political subdivisions256,688 — 256,688 — 
Pooled trust preferred securities12,987 — 12,987 — 
Other securities145,357 — 145,357 — 
Loans held-for-sale30,456 — 30,456 — 
Derivative assets319,113 — 319,113 — 
Financial Liabilities
Derivative liabilities520,026 — 520,026 — 
Fair Value Measurements at December 31, 2025 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$128,857 $128,857 $— $— 
Investment securities available-for-sale:
U.S. Treasury214,544 214,544 — — 
U.S. government-sponsored entities and agencies1,372,392 — 1,372,392 — 
Mortgage-backed securities - Agency9,168,035 — 9,168,035 — 
States and political subdivisions426,008 — 426,008 — 
Pooled trust preferred securities11,734 — 11,734 — 
Other securities191,737 — 191,737 — 
Loans held-for-sale52,911 — 52,911 — 
Derivative assets170,828 — 170,828 — 
Financial Liabilities
Derivative liabilities258,968 — 258,968 — 
Non-Recurring Basis
Assets measured at fair value on a non-recurring basis at September 30, 2026 are summarized below:
Fair Value Measurements at September 30, 2026 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$81,438 $— $— $81,438 
Commercial real estate loans60,091 — — 60,091 
Foreclosed Assets:
Commercial real estate143 — — 143 
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 $239.4 million, with a valuation allowance of $97.9 million at September 30, 2026. Old National recorded provision expense associated with these loans totaling $45.9 million and $92.4 million for the three and nine months ended September 30, 2026, respectively, compared to $7.7 million and $32.4 million for the three and nine months ended September 30, 2025, 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 $0.1 million at September 30, 2026. There were no material write-downs on other real estate owned for the three and nine months ended September 30, 2026, compared to no material write-downs and $0.5 million for the three and nine months ended September 30, 2025, respectively.
Assets measured at fair value on a non-recurring basis at December 31, 2025 are summarized below:
Fair Value Measurements at December 31, 2025 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$55,471 $— $— $55,471 
Commercial real estate loans109,852 — — 109,852 
Foreclosed Assets:
Commercial real estate975 — — 975 
Residential98 — — 98 
At December 31, 2025, commercial and commercial real estate loans that are deemed collateral dependent had a principal amount of $256.3 million, with a valuation allowance of $90.9 million. Net carrying amount of other real estate owned and other repossessed property totaled $1.1 million at December 31, 2025.
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, 2026
Collateral Dependent Loans
Commercial loans$81,438 DiscountedDiscount for type of property,
7% - 50% (33%)
cash flowage of appraisal, and current status
Commercial real estate loans60,091 DiscountedDiscount for type of property,
6% - 50% (18%)
cash flowage of appraisal, and current status
Foreclosed Assets
Commercial real estate (2)
143 Fair value ofDiscount for type of property,
—%
collateralage of appraisal, and current status
December 31, 2025
Collateral Dependent Loans
Commercial loans$55,471 DiscountedDiscount for type of property,
8% - 50% (35%)
cash flowage of appraisal, and current status
Commercial real estate loans109,852 DiscountedDiscount for type of property,
2% - 61% (17%)
cash flowage of appraisal, and current status
Foreclosed Assets
Commercial real estate (2)
975 Fair value ofDiscount for type of property,
30%
collateralage of appraisal, and current status
Residential (2)
98 Fair value ofDiscount for type of property,
44%
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 commercial real estate property at September 30, 2026 with no write-downs during the nine months ended September 30, 2026. There was only one foreclosed commercial real estate property and one foreclosed residential property at December 31, 2025 with write-downs during the year ended December 31, 2025, 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 $0.8 million and $2.4 million for the three and nine months ended September 30, 2026, respectively, compared to $0.9 million and $2.6 million for the three and nine months ended September 30, 2025, 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, 2026
Loans held-for-sale$30,456 $(466)$30,922 
December 31, 2025
Loans held-for-sale$52,911 $1,148 $51,763 
Accrued interest at period end is included in the fair value of the instruments.
The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:
(dollars in thousands)Other
Gains and (Losses)		Interest IncomeInterest (Expense)Total Changes
in Fair Values
Included in
Current Period Earnings
Three Months Ended September 30, 2026
Loans held-for-sale$(1,202)$— $(23)$(1,225)
Three Months Ended September 30, 2025
Loans held-for-sale$152 $— $(72)$80 
Nine Months Ended September 30, 2026
Loans held-for-sale$(1,576)$23 $(61)$(1,614)
Nine Months Ended September 30, 2025
Loans held-for-sale$1,538 $101 $(81)$1,558 
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, 2026 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		$1,679,028 $1,679,028 $— $— 
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies827,022 — 646,493 — 
Mortgage-backed securities - Agency859,434 — 690,914 — 
State and political subdivisions1,136,471 — 926,490 — 
Loans, net:
Commercial16,007,510 — — 16,188,235 
Commercial real estate22,451,446 — — 22,693,254 
Residential real estate8,880,932 — — 7,965,104 
Consumer credit3,228,517 — — 3,313,561 
Accrued interest receivable308,943 1,106 70,514 237,323 
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits$12,847,561 $12,847,561 $— $— 
Checking, NOW, savings, and money market
   interest-bearing deposits		33,939,182 33,939,182 — — 
Time deposits10,852,364 — 10,787,734 — 
Federal funds purchased and interbank borrowings484 484 — — 
Securities sold under agreements to repurchase240,698 240,698 — — 
FHLB advances5,484,611 — 5,451,538 — 
Other borrowings1,408,438 — 1,393,695 — 
Accrued interest payable66,631 — 66,631 — 
Standby letters of credit2,073 — — 2,073 
Off-Balance Sheet Financial Instruments
Commitments to extend credit$— $— $— $5,737 
Fair Value Measurements at December 31, 2025 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		$1,826,177 $1,826,177 $— $— 
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies840,435 — 710,909 — 
Mortgage-backed securities - Agency910,323 — 782,818 — 
State and political subdivisions1,144,730 — 1,046,511 — 
Loans, net:
Commercial14,737,809 — — 14,831,563 
Commercial real estate21,780,686 — — 21,806,075 
Residential real estate8,433,102 — — 7,526,511 
Consumer credit3,243,045 — — 3,027,561 
Accrued interest receivable306,812 894 77,288 228,630 
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits$13,247,483 $13,247,483 $— $— 
Checking, NOW, savings, and money market
   interest-bearing deposits		32,179,688 32,179,688 — — 
Time deposits9,661,024 — 9,540,748 — 
Federal funds purchased and interbank borrowings100,197 100,197 —— 
Securities sold under agreements to repurchase261,366 261,366 —— 
FHLB advances6,237,375 — 6,229,752 — 
Other borrowings852,429 — 853,938 — 
Accrued interest payable65,291 — 65,291 — 
Standby letters of credit1,672 — — 1,672 
Off-Balance Sheet Financial Instruments
Commitments to extend credit$— $— $— $5,687 
The methods utilized to measure the fair value of financial instruments at September 30, 2026 and December 31, 2025 represent an approximation of exit price, however, an actual exit price may differ.