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Old National to boost loan loss allowance by $35M to $45M due to CECL


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Old National to boost loan loss allowance by $35M to $45M due to CECL

Old National Bancorp will have to increase its allowances for loan losses by about $35 million to $45 million when it transitions on Jan. 1 to the new current expected credit loss accounting standard, the company said Oct. 21.

The wide allowance range for the Evansville, Ind.-based bank is due to uncertainty regarding where the broader U.S. economy is headed, CFO Brendon B. Falconer said on an analyst call after the bank's third-quarter earnings release. If economic conditions remain roughly stable, Old National's increased allowance for loan losses would likely come in at the lower end of the range, Falconer added.

Old National executives will provide more details on the effects of CECL during their fourth-quarter earnings call, and the bank is working on finalizing its internal control and governance frameworks on CECL in the meantime, Falconer said.