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Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The 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
June 30,		Six Months Ended
June 30,
(dollars in thousands)2025202420252024
Provision at statutory rate of 21%
$32,698 $32,861 $70,826 $64,943 
Tax-exempt income:
Tax-exempt interest(5,599)(5,027)(9,851)(9,985)
Section 291/265 interest disallowance1,364 957 2,033 1,841 
Company-owned life insurance income(1,397)(1,178)(2,532)(1,872)
Tax-exempt income(5,632)(5,248)(10,350)(10,016)
State income taxes5,094 6,333 11,995 11,480 
Interim period effective rate adjustment(159)(70)(306)873 
Tax credit investments - federal(5,156)(3,106)(9,258)(6,160)
Officer compensation limitation1,436 1,491 1,808 2,256 
Non-deductible FDIC premiums2,816 2,032 4,853 3,779 
Other, net(799)957 (2,366)583 
Income tax expense$30,298 $35,250 $67,202 $67,738 
Effective tax rate19.5 %22.5 %19.9 %21.9 %
Net Deferred Tax Assets
Net deferred tax assets are included in other assets on the balance sheet. At June 30, 2025, net deferred tax assets totaled $527.9 million, compared to $456.4 million at December 31, 2024. No valuation allowance was required on the Company’s deferred tax assets at June 30, 2025 or December 31, 2024.
The Company’s retained earnings at June 30, 2025 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.
Old National has federal net operating loss carryforwards totaling $183.1 million at June 30, 2025 and $60.2 million at December 31, 2024. This federal net operating loss was acquired from the acquisition of Anchor BanCorp Wisconsin Inc. in 2016, First Midwest Bancorp, Inc. in 2022, CapStar Financial Holdings, Inc. in 2024, and Bremer Financial Corporation in 2025. Old National also generated a federal net operating loss of $59.1 million at June 30, 2025. If not used, the federal net operating loss carryforwards will begin expiring in 2032 and later. Old National has recorded state net operating loss carryforwards totaling $148.4 million at June 30, 2025 and $106.0 million at December 31, 2024. If not used, the state net operating loss carryforwards will expire from 2028 to 2044.
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.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which contain numerous tax provisions. Since the bill was signed after the close of the quarter, no financial statement impact was reflected in the second quarter of 2025. The Company is currently evaluating the impact of the OBBBA on the consolidated financial statements and does not believe it will have a material impact.