OLD NATIONAL BANCORP /IN/ONB
OLD NATIONAL BANCORP /IN/ Leases Disclosure
LEASES
Old National determines if an arrangement is or contains a lease at contract inception. Operating leases are included in other assets and other liabilities in our consolidated balance sheets. Finance leases are included in premises and equipment and other borrowings in our consolidated balance sheets.
Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use the implicit lease rate when readily determinable. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date. The incremental borrowing rate is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
Old National has operating and finance leases for land, office space, banking centers, and equipment. These leases are generally for periods of 5 to 30 years with various renewal options. We include certain renewal options in the measurement of our right-of-use assets and lease liabilities if they are reasonably certain to be exercised. Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit
and loss when incurred. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.
Old National has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated. Variable lease one-time costs that are not dependent upon an index or a rate are included in noninterest expense. For certain equipment leases, Old National accounts for the lease and non-lease components as a single lease component using the practical expedient available for that class of assets. Old National does not have any material sub-lease agreements.
The components of lease expense were as follows:
| Affected Line Item in the Statement of Income | Years Ended December 31, | |||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Operating lease cost | Occupancy/Equipment expense | $ | 36,100 | $ | 32,603 | $ | 31,175 | |||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of right-of-use assets | Occupancy expense | 9,235 | 6,688 | 2,921 | ||||||||||||||||
| Interest on lease liabilities | Interest expense | 901 | 1,039 | 722 | ||||||||||||||||
| Sub-lease income | Occupancy expense | (355) | (446) | (387) | ||||||||||||||||
| Total | $ | 45,881 | $ | 39,884 | $ | 34,431 | ||||||||||||||
Supplemental balance sheet information related to leases was as follows:
| December 31, | |||||||||||
| (dollars in thousands) | 2025 | 2024 | |||||||||
| Operating Leases | |||||||||||
| $ | 209,327 | $ | 181,920 | ||||||||
| 226,624 | 200,068 | ||||||||||
| Finance Leases | |||||||||||
| 23,950 | 23,205 | ||||||||||
| 25,798 | 24,822 | ||||||||||
| Weighted-Average Remaining Lease Term (in Years) | |||||||||||
| Operating leases | 8.7 | 7.8 | |||||||||
| Finance leases | 7.0 | 7.8 | |||||||||
| Weighted-Average Discount Rate | |||||||||||
| Operating leases | 3.72 | % | 3.14 | % | |||||||
| Finance leases | 4.04 | % | 3.96 | % | |||||||
Supplemental cash flow information related to leases was as follows:
| Years Ended December 31, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | 37,777 | $ | 33,281 | $ | 31,720 | |||||||||||
| Operating cash flows from finance leases | 901 | 1,039 | 722 | ||||||||||||||
| Financing cash flows from finance leases | 9,003 | 6,206 | 2,533 | ||||||||||||||
The following table presents a maturity analysis of the Company’s lease liability by lease classification at December 31, 2025:
| (dollars in thousands) | Operating Leases | Finance Leases | |||||||||
| 2026 | $ | 39,743 | $ | 9,757 | |||||||
| 2027 | 38,359 | 3,750 | |||||||||
| 2028 | 34,428 | 2,886 | |||||||||
| 2029 | 31,705 | 1,498 | |||||||||
| 2030 | 27,363 | 1,533 | |||||||||
| Thereafter | 96,184 | 10,446 | |||||||||
| Total undiscounted lease payments | 267,782 | 29,870 | |||||||||
| Amounts representing interest | (41,158) | (4,072) | |||||||||
| Lease liability | $ | 226,624 | $ | 25,798 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 10, 2021 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.