Qualified Affordable Housing Projects and Other Tax Credit Investments

12 Months Ended

Dec. 31, 2020

Qualified Affordable Housing Projects and Other Tax Credit Investments

QUALIFIED AFFORDABLE HOUSING PROJECTS AND OTHER TAX CREDIT INVESTMENTS

Old National is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects. These investments are included in other assets on the balance sheet, with any unfunded commitments included with other liabilities. As of December 31, 2020, Old National expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

The following table summarizes Old National’s investments in qualified affordable housing projects and other tax credit investments:


(dollars in thousands)		December 31, 2020				December 31, 2019
Investment	Accounting Method	Investment		Unfunded Commitment (1)		Investment		Unfunded Commitment
LIHTC	Proportional amortization	$	33,609	$	6,845	$	29,735	$	3,911
FHTC	Equity	18,660		22,398		22,403		17,886
NMTC	Proportional amortization	6,120		—		—		—
Renewable Energy	Equity	3,611		862		7,523		4,129
Total		$	62,000	$	30,105	$	59,661	$	25,926

(1)All commitments will be paid by Old National by 2027.

The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments:


(dollars in thousands)	Amortization Expense (1)		Tax Expense (Benefit) Recognized (2)
Year Ended December 31, 2020
LIHTC	$	3,105	$	(4,071)
FHTC	13,237		(15,582)
NMTC	900		(1,100)
Renewable Energy	4,651		(4,122)
Total	$	21,893	$	(24,875)

Year Ended December 31, 2019
LIHTC	$	3,168	$	(4,102)
FHTC	1,113		(1,244)
CReED (3)	13		—
Renewable Energy	1,623		(1,740)
Total	$	5,917	$	(7,086)

Year Ended December 31, 2018
LIHTC	$	2,585	$	(3,349)
FHTC	9,206		(10,775)
CReED (3)	687		(687)
Renewable Energy	13,056		(14,566)
Total	$	25,534	$	(29,377)

(1) The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, CReED, and Renewable Energy tax credits is included in noninterest expense.

(2) All of the tax benefits recognized are included in our income tax expense. The tax benefit recognized for the FHTC, NMTC, CReED, and Renewable Energy investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).

(3) The CReED tax credit investment qualifies for an Indiana state tax credit.