Company: ONBPP
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000707179-25-000018
Chunk: 169

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-07-30
Form: 10-Q
Item: Item 8
Chunk 169
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 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.

NOTE 15 – DERIVATIVE FINANCIAL INSTRUMENTS

As part of our overall interest rate risk management, Old National uses derivative instruments, including interest rate swaps, collars, and floors. The notional amount does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative instruments are recognized on the balance sheet at their fair value and are not reported on a net basis.

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Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. Old National’s exposure is limited to the termination value of the contracts rather than the notional, principal, or contract amounts. There are provisions in our agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, we minimize credit risk through credit approvals, limits, and monitoring procedures.Derivatives Designated as HedgesSubsequent changes in fair value for a hedging instrument that has been designated and qualifies as part of a hedging relationship are accounted for in the following manner:Cash flow hedges: changes in fair value are recognized as a component in other comprehensive income (loss).Fair value hedges: changes in fair value are recognized concurrently in earnings.As long as a hedging instrument is designated, and the results of the effectiveness testing support that the instrument qualifies for hedge accounting treatment, 100% of the periodic changes in fair value of the hedging instrument are accounted for as outlined above. This is the case whether or not economic mismatches exist in the hedging relationship. As a result, there is no periodic measurement or recognition of ineffectiveness. Rather, the full impact of hedge gains and losses is recognized in the period in which the hedged transactions impact earnings.The change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness is presented in the same income