Bank CEO Bob Jones said a routine internal review in the middle of the first quarter discovered a loan document that had been forged by the loan officer, whom he would not identify.
Further reviews of the officer's portfolio uncovered more than a handful of loans with forged borrower signatures, Jones said. The officer was fired shortly thereafter.
The total value of the various loans came to $17 million. However, Jones emphasized the loans were made to "reputable" borrowers - mostly businesses whose owners and managers knew nothing of the forged documents. Thus, the bank can draw from collateral on those loans if they sour.
The banks also might be able to collect insurance if an FBI investigation underway determines the forgeries were fraud.
Neither the officer nor the borrowers stole money, Jones said.
Jones added that he is mystified why the officer would forge borrowers' names.
Although the forgeries were discovered weeks ago, Old National waited until today to disclose the information because the bank hadn't finished its internal investigation.
Old National shares were trading late this morning at $17.52, down 68 cents.