Qualified Affordable Housing Projects and Other Tax Credit Investments

9 Months Ended

Sep. 30, 2023

Investments in Affordable Housing Projects [Abstract]

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 September 30, 2023, 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)		September 30, 2023				December 31, 2022
Investment	Accounting Method	Investment		Unfunded Commitment (1)		Investment		Unfunded Commitment
LIHTC	Proportional amortization	$	93,214	$	54,440	$	84,428	$	55,754
FHTC	Equity	36,715		27,214		19,316		9,588
NMTC	Consolidation	45,637		—		51,912		—
Renewable Energy	Equity	385		—		1,099		—
Total		$	175,951	$	81,654	$	156,755	$	65,342

(1)All commitments will be paid by Old National by December 31, 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)
Three Months Ended September 30, 2023
LIHTC	$	3,208	$	(3,582)
FHTC	330		(399)
NMTC	2,092		(2,611)
Renewable Energy	222		—
Total	$	5,852	$	(6,592)

Three Months Ended September 30, 2022
LIHTC	$	1,240	$	(1,650)
FHTC	215		(262)
NMTC	2,237		(2,788)
Renewable Energy	210		—
Total	$	3,902	$	(4,700)

Nine Months Ended September 30, 2023
LIHTC	$	6,135	$	(7,398)
FHTC	1,178		(1,423)
NMTC	6,275		(7,833)
Renewable Energy	714		—
Total	$	14,302	$	(16,654)

Nine Months Ended September 30, 2022
LIHTC	$	3,734	$	(4,950)
FHTC	635		(776)
NMTC	4,439		(5,538)
Renewable Energy	629		—
Total	$	9,437	$	(11,264)

(1)The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, 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, 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).