Old National Bank further enhances credit and risk strategy


Daryl Moore | Chief Credit Executive & Senior EVP at Old National Bank
March 24, 2021 

Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach that we call The ONB Way and it has never been more important given the ongoing challenges being presented by COVID-19.

I have been in banking for several decades and this is the sixth recession I have been through, but the events of the last year are like nothing I have experienced before. In the future, there will no doubt be more recessions and other unprecedented events, so we need to ensure we are future-proofed. This is particularly true when it comes to commercial credit risk.

At Old National, we have always had a strong credit culture at the individual credit level, and the pandemic has demonstrated the strengths of our approach to underwriting, but has also highlighted areas where we should investment further.

When the pandemic hit, we knew we needed to determine where our highest risk was in our commercial loan portfolio and how to address it – and it became clear to me very quickly that Old National’s process was too manual and that we needed to get our data organized. It was this that catalyzed a conversation we had been having with OakNorth. As we began to speak with the business about its product, the ON Credit Intelligence Suite, we realized that if we had this software in place before the pandemic struck, we could have been much more strategic in addressing the risk in our portfolio.

As bankers, we know the clients you support in the tough times and during the cycles like we are in currently, often become your most loyal. So, OakNorth’s ability to help us gain clarity on the challenges our clients are facing and what level of support they need and when, will be critical for our business over the next 18-24 months.

At Old National, we have dedicated ourselves to knowing and understanding the risks facing each of our borrowers so that we can effectively address them, provision for them, and continue to effectively serve those customers.

We have grown our loan book since March 2020, so it is imperative to know which industries have the highest risk on a go forward basis and which of those industries we can lend into. OakNorth’s software will enable us to do that through better analyzing and stress testing our portfolio at speed in a consistent, objective fashion. Through the continuous monitoring of active credits, OakNorth’s software will also enable us to turn monitoring into a real-time process. This in turn will mean we can build deeper and more meaningful relationships with clients – having a consultative relationship with our borrowers – as well as ensuring our Relationship Managers have more time and better insights to originate new deals.

Commercial lending is changing, and COVID-19 has accelerated this change. This is forcing banks to look at their existing data, processes, approach to credit risk, and technology, and determine where investments should be made to further enhance these.

Read the full article here