NOTE 10 – 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 or other renovation or community revitalization projects. As of December 31, 2017, 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 at December 31, 2017 and 2016:

(dollars in thousands)

December 31, 2017

December 31, 2016

Investment

Accounting Method

Investment

Unfunded
Commitment (1)

Investment

Unfunded
Commitment

LIHTC

Proportional amortization

31,183

15,553

29,110

16,210

FHTC

Equity

10,645

12,040

4,434

3,104

CReED

Equity

704

1,502

1,504

1,502

Renewable Energy

Equity

22,364

19,771

—

Total

64,896

48,866

35,048

20,816

(1)	All commitments will be paid by Old National by 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 during 2017, 2016, and 2015:


(dollars in thousands)	Amortization Expense (1)		Tax Benefit Recognized (2)
Year ended December 31, 2017
LIHTC	$	1,922	$	(2,666	)
FHTC		10,441		(11,348	)
CReED (3)		800		(1,074	)
Renewable Energy		492		(613	)

Total	$	13,655	$	(15,701	)

Year ended December 31, 2016
LIHTC	$	804	$	(1,125	)
FHTC		—		—
CReED (3)		—		—

Total	$	804	$	(1,125	)

Year ended December 31, 2015
LIHTC	$	804	$	(1,125	)
FHTC		—		—
CReED (3)		—		—
NMTC		143		(233	)

Total	$	947	$	(1,358	)

(1)	The amortization expense for the LIHTC investments are included in our income tax expense. The amortization expense for the FHTC, CReED, and Renewable Energy tax credits are 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, CReED, and Renewable Energy investments primarily reflects the tax credits generated from the investments, and excludes the net tax expense/benefit of the investments’ income/loss.

(3)	The CReED tax credit investment qualifies for an Indiana state tax credit.