OLD NATIONAL BANCORP /IN/ONB

OLD NATIONAL BANCORP /IN/ Commitments Disclosure

10-KFiled Feb 19, 20262 min read
COMMITMENTS, CONTINGENCIES, AND FINANCIAL GUARANTEES
Litigation
At December 31, 2025, 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 litigation 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:
December 31,
(dollars in thousands)20252024
Unfunded loan commitments (1)
$12,145,320 $8,533,433 
Standby letters of credit (2)
199,638 194,323 
(1)Excludes cancellable loan commitments of $2.8 billion at December 31, 2025 and $2.5 billion at December 31, 2024.
(2)Notional amount, which represents the maximum amount of future funding requirements. The carrying value was $1.7 million at both December 31, 2025 and December 31, 2024.
At December 31, 2025, approximately 3% of the unfunded loan commitments had fixed rates, with the remainder having floating rates ranging from 0.01% to 20.74%. The allowance for unfunded loan commitments totaled $35.6 million at December 31, 2025 and $21.7 million at December 31, 2024.
Old National is a party in risk participation transactions of interest rate swaps, which had total notional amounts of $1.3 billion at December 31, 2025 and $730.5 million at December 31, 2024.
Visa Class B Restricted Shares
In 2008, Old National received Visa Class B restricted shares as part of Visa’s initial public offering. During the fourth quarter of 2023, Old National sold the 65,466 Class B shares and recognized a $21.6 million pre-tax gain. Prior to the sale, the shares were carried at a zero cost basis due to uncertainty surrounding the ability of the
Company to transfer or otherwise liquidate the shares. After the sale, the Company did not hold any remaining Visa Class B restricted shares.

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 19, 2025
2023Feb 22, 2024
2022Feb 22, 2023
2021Feb 10, 2022
2020Feb 10, 2021
2019Feb 12, 2020
2018Feb 12, 2019
2017Feb 15, 2018
2016Feb 16, 2017

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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