OLD NATIONAL BANCORP IN
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
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Income Taxes
NOTE 14 –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 EndedJune 30, | Six Months EndedJune 30, | |||
|---|---|---|---|---|
| (dollars in thousands) | 2024 | 2023 | 2024 | 2023 |
| Provision at statutory rate of 21% | $32,861 | $42,510 | $64,943 | $81,995 |
| Tax-exempt income: | ||||
| Tax-exempt interest | (5,027) | (4,605) | (9,985) | (9,091) |
| Section 291/265 interest disallowance | 957 | 532 | 1,841 | 918 |
| Company-owned life insurance income | (1,178) | (945) | (1,872) | (1,572) |
| Tax-exempt income | (5,248) | (5,018) | (10,016) | (9,745) |
| State income taxes | 6,333 | 8,552 | 11,480 | 16,693 |
| Interim period effective rate adjustment | (70) | 993 | 873 | (723) |
| Tax credit investments - federal | (3,106) | (2,526) | (6,160) | (5,051) |
| Officer compensation limitation | 1,491 | 1,040 | 2,256 | 2,080 |
| Non-deductible FDIC premiums | 2,032 | 2,037 | 3,779 | 4,147 |
| Other, net | 957 | (195) | 583 | (582) |
| Income tax expense | $35,250 | $47,393 | $67,738 | $88,814 |
| Effective tax rate | 22.5% | 23.4% | 21.9% | 22.8% |
Net Deferred Tax Assets
Net deferred tax assets are included in other assets on the balance sheet. At June 30, 2024, net deferred tax assets totaled $456.4 million, compared to $423.3 million at December 31, 2023. No valuation allowance was required on the Company’s deferred tax assets at June 30, 2024 or December 31, 2023.
The Company’s retained earnings at June 30, 2024 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 $75.3 million at June 30, 2024 and $63.6 million at December 31, 2023. This federal net operating loss was acquired from the acquisition of Anchor BanCorp Wisconsin Inc. in 2016, First Midwest Bancorp, Inc. in 2022, and CapStar Financial Holdings, Inc. in 2024. 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 $111.2 million at June 30, 2024 and $116.9 million at December 31, 2023. 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.
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