Old National Bancorp (ONB) risk factors, FY2024 10-K

Strategic, Financial, and Reputational Risks

1. 01Economic conditions have affected and could continue to adversely affect our revenues and profits
2. 02Changes in economic or political conditions have adversely affected, and may continue to adversely affect, Old National’s earnings, if the ability of Old National’s borrowers to repay loans, or the value of the collateral securing such loans, declines
3. 03Old National’s regional concentrations expose it to adverse economic conditions in the locations in which Old National operates
4. 04We have acquired, and expect to continue to acquire, other financial institutions or parts of those institutions and other businesses related to banking in the future, and we may engage in de novo banking center expansion. We may also consider and enter into new lines of business or offer new products or services
5. 05Mergers and acquisitions may be delayed, impeded, or prohibited due to regulatory issues
6. 06Failure to complete the Merger could negatively impact Old National
7. 07Our accounting estimates and risk management processes rely on analytical and forecasting models
8. 08Old National operates in an extremely competitive market, and Old National’s business will suffer if Old National is unable to compete effectively
9. 09Our business could suffer if we fail to attract and retain skilled people
10. 10We may not be able to pay dividends in the future in accordance with past practice
11. 11Old National may not realize the expected benefits of its strategic imperatives
12. 12Climate change could have a material negative impact on the Company and clients
13. 13Old National is exposed to reputational risk
14. 14In addition, whereas negative public opinion once was primarily driven by adverse news coverage in traditional media, the increased use of social media platforms facilitates the rapid dissemination of information or misinformation, which magnifies the potential harm to the Company’s reputation
15. 15If Old National’s actual credit losses for loans or debt securities exceed Old National’s allowance for credit losses on loans and debt securities, Old National’s net income will decrease. Also, future additions to Old National’s allowance for credit losses will reduce Old National’s future earnings
16. 16Old National’s loan portfolio includes loans with a higher risk of loss
17. 17In addition, as described further in this “Risk Factors” section, the Company’s credit risks may be increased by the impacts of inflation, poor or recessionary economic conditions and financial market volatility
18. 18If Old National forecloses on real property collateral, Old National may be subject to the increased costs associated with the ownership of real property, resulting in reduced revenues
19. 19The soundness of other financial institutions could adversely affect Old National

Market, Interest Rate, and Liquidity Risks

1. 20The price of Old National’s Common Stock may be volatile, which may result in losses for investors
2. 21The Company must maintain adequate sources of funding and liquidity
3. 22If the Company is unable to maintain or grow its deposits, it may be subject to paying higher funding costs
4. 23Our wholesale funding sources may prove insufficient to replace deposits or support our future growth
5. 24Old National relies on dividends from Old National Bank for its liquidity
6. 25A reduction in our credit rating could adversely affect our business and/or the holders of our securities
7. 26Unrealized losses in our securities portfolio could affect liquidity

Operational Risks

1. 27A failure or breach, including as a result of a cyber-attack, of our operational or security systems, or the systems of our external vendors, could disrupt our business, result in the disclosure of confidential information, damage our reputation, and create significant financial and legal exposure
2. 28Old National is subject to laws and regulations relating to the privacy of the information of clients, employees or others, and any failure to comply with these laws and regulations could expose the Company to liability and/or reputational damage
3. 29We rely on third party vendors, which could expose Old National to additional cybersecurity and operational risks
4. 30Failure to keep pace with technological change could adversely affect Old National’s results of operations and financial condition
5. 31Changes in consumer use of banks and changes in consumer spending and savings habits could adversely affect Old National’s financial results
6. 32Old National’s controls and procedures may fail or be circumvented, and Old National’s methods of reducing risk exposure may not be effective
7. 33Pandemics, acts of war or terrorism, and other adverse external events could significantly affect Old National’s business
8. 34Old National is subject to environmental liability risk associated with lending activities
9. 35Old National’s reported financial condition and results of operations depend on management’s selection of accounting methods and require management to make estimates about matters that are uncertain

Legal, Regulatory, and Compliance Risks

1. 36Old National operates in a highly regulated environment, and changes in laws and regulations to which Old National is subject may adversely affect Old National’s results of operations
2. 37Fee revenues from overdraft protection programs may be subject to increased supervisory scrutiny
3. 38We may incur fines, penalties and other negative consequences from regulatory violations, possibly even inadvertent or unintentional violations
4. 39We have risk related to legal proceedings
5. 40Changes in accounting policies, standards, and interpretations could materially affect how Old National reports its financial condition and results of operations
6. 41If Old National fails to meet regulatory capital requirements, which may require heightened capital levels, we may be forced to raise capital or sell assets
7. 42Old National could be subject to adverse changes or interpretations of tax laws, tax audits, or challenges to our tax positions
8. 43Our earnings could be adversely impacted by incidences of fraud and compliance failure