Financial Guarantees

6 Months Ended

Jun. 30, 2020

Guarantees and Product Warranties [Abstract]

Financial Guarantees

FINANCIAL GUARANTEESOld National holds instruments, in the normal course of business with clients, that are considered financial guarantees in accordance with FASB ASC 460-10 (FIN 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others), which requires Old National to record the instruments at fair value.  Standby letters of credit guarantees are issued in connection with agreements made by clients to counterparties.  Standby letters of credit are contingent upon failure of the client to perform the terms of the underlying contract.  Credit risk associated with standby letters of credit is essentially the same as that associated

with extending loans to clients and is subject to normal credit policies.  The term of these standby letters of credit is typically one year or less.  At June 30, 2020, the notional amount of standby letters of credit was $84.3 million, which represented the maximum amount of future funding requirements, and the carrying value was $0.4 million.  At December 31, 2019, the notional amount of standby letters of credit was $87.8 million, which represented the maximum amount of future funding requirements, and the carrying value was $0.6 million.

Old National is a party in risk participation transactions of interest rate swaps, which had total notional amount of $49.0 million at June 30, 2020.