XML 35 R25.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Income Taxes | 9 Months Ended
--- | ---
Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Provision at statutory rate of 21% | $ | 37,598 |  |  | $ | 18,779 |  |  | $ | 59,365 |  |  | $ | 56,830 |
Tax-exempt income: |  |  |  |  |  |  |
Tax-exempt interest | (3,929) |  |  | (2,786) |  |  | (10,335) |  |  | (8,327) |
Section 291/265 interest disallowance | 85 |  |  | 28 |  |  | 150 |  |  | 92 |
Company-owned life insurance income | (684) |  |  | (483) |  |  | (2,340) |  |  | (1,582) |
Tax-exempt income | (4,528) |  |  | (3,241) |  |  | (12,525) |  |  | (9,817) |
State income taxes | 7,050 |  |  | 2,282 |  |  | 7,808 |  |  | 7,455 |
Interim period effective rate adjustment | (31) |  |  | 1,077 |  |  | 3,042 |  |  | (1,360) |
Tax credit investments - federal | (2,407) |  |  | (315) |  |  | (4,968) |  |  | (2,838) |
Other, net | 1,205 |  |  | (902) |  |  | 2,415 |  |  | (1,000) |
Income tax expense (benefit) | $ | 38,887 |  |  | $ | 17,680 |  |  | $ | 55,137 |  |  | $ | 49,270 |
Effective tax rate | 21.7 | % |  | 19.8 | % |  | 19.5 | % |  | 18.2 | %
The provision for income taxes was recorded at September 30, 2022 and 2021 based on the current estimate of the effective annual rate. The higher effective tax rate during the three and nine months ended September 30, 2022 compared to the same periods in 2021 reflected the increase in pre-tax book income and higher post-merger estimated state effective tax rates. Net Deferred Tax Assets Net deferred tax assets are included in other assets on the balance sheet. At September 30, 2022, net deferred tax assets totaled $426.0 million, compared to $32.9 million at December 31, 2021. The increase in net deferred tax assets was driven by $255.7 million of deferred tax assets related to the market value adjustments of certain investments and $130.3 million related to the merger with First Midwest. The Company’s retained earnings at September 30, 2022 included an appropriation for acquired thrifts’ tax bad debt allowances totaling $58.6 million for which no provision for federal or state income taxes has been made. If, in the future, this portion of retained earnings were distributed as a result of the liquidation of the Company or its subsidiaries, federal and state income taxes would be imposed at the then applicable rates. No valuation allowance was recorded at September 30, 2022 or December 31, 2021 because, based on current expectations, Old National believes it will generate sufficient income in future years to realize deferred tax assets. Old National has federal net operating loss carryforwards totaling $85.7 million at September 30, 2022 and $36.7 million at December 31, 2021. This federal net operating loss was acquired from the acquisition of Anchor (WI) in 2016 and First Midwest in 2022. If not used, the federal net operating loss carryforwards will begin expiring in 2030 and later. Old National has recorded state net operating loss carryforwards totaling $130.1 million at September 30, 2022 and $116.1 million at December 31, 2021. If not used, the state net operating loss carryforwards will expire from 2027 to 2036. The federal and recorded state net operating loss carryforwards are subject to an annual limitation under Internal Revenue Code section 382. Old National believes that all of the federal and recorded state net operating loss carryforwards will be used prior to expiration.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration