þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
INDIANA | 35-1539838 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
One Main Street | 47708 | |
Evansville, Indiana | (Zip Code) | |
(Address of principal executive offices) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
2
September 30, | December 31, | September 30, | ||||||||||
(dollars and shares in thousands, except per share data) | 2011 | 2010 | 2010 | |||||||||
(unaudited) | (unaudited) | |||||||||||
Assets |
||||||||||||
Cash and due from banks |
$ | 194,606 | $ | 107,368 | $ | 129,169 | ||||||
Money market and other interest-earning investments |
74,623 | 144,184 | 43,102 | |||||||||
Total cash and cash equivalents |
269,229 | 251,552 | 172,271 | |||||||||
Trading securities at fair value |
2,794 | | | |||||||||
Investment securities available-for-sale, at fair value |
||||||||||||
U.S. Treasury |
65,951 | 62,550 | 51,814 | |||||||||
U.S. Government-sponsored entities and agencies |
180,934 | 315,133 | 538,148 | |||||||||
Mortgage-backed securities |
1,441,585 | 1,071,252 | 1,102,758 | |||||||||
States and political subdivisions |
391,202 | 348,924 | 336,993 | |||||||||
Other securities |
173,417 | 162,363 | 161,091 | |||||||||
Total investment securities available-for-sale |
2,253,089 | 1,960,222 | 2,190,804 | |||||||||
Investment securities held-to-maturity, at amortized cost
(fair value $517,427, $625,643 and $770,688 respectively) |
493,282 | 638,210 | 753,835 | |||||||||
Federal Home Loan Bank stock, at cost |
34,870 | 31,937 | 36,090 | |||||||||
Residential loans held for sale, at fair value |
4,710 | 3,819 | 3,512 | |||||||||
Loans: |
||||||||||||
Commercial |
1,246,289 | 1,211,399 | 1,266,893 | |||||||||
Commercial real estate |
1,128,374 | 942,395 | 981,524 | |||||||||
Residential real estate |
865,951 | 664,705 | 482,967 | |||||||||
Consumer credit, net of unearned income |
899,446 | 924,952 | 971,756 | |||||||||
Covered loans, net of discount |
711,266 | | | |||||||||
Total loans |
4,851,326 | 3,743,451 | 3,703,140 | |||||||||
Allowance for loan losses |
(65,219 | ) | (72,309 | ) | (72,149 | ) | ||||||
Allowance for loan losses covered loans |
(303 | ) | | | ||||||||
Net loans |
4,785,804 | 3,671,142 | 3,630,991 | |||||||||
FDIC indemnification asset |
168,091 | | | |||||||||
Premises and equipment, net |
75,257 | 48,775 | 50,057 | |||||||||
Accrued interest receivable |
43,713 | 42,971 | 44,376 | |||||||||
Goodwill |
265,985 | 167,884 | 167,884 | |||||||||
Other intangible assets |
36,298 | 26,178 | 27,681 | |||||||||
Company-owned life insurance |
247,234 | 226,192 | 225,985 | |||||||||
Other real estate owned |
9,390 | 5,591 | 5,886 | |||||||||
Other real estate owned covered |
31,908 | | | |||||||||
Other assets |
211,046 | 189,419 | 196,742 | |||||||||
Total assets |
$ | 8,932,700 | $ | 7,263,892 | $ | 7,506,114 | ||||||
Liabilities |
||||||||||||
Deposits: |
||||||||||||
Noninterest-bearing demand |
$ | 1,728,548 | $ | 1,276,024 | $ | 1,267,404 | ||||||
Interest-bearing: |
||||||||||||
NOW |
1,517,117 | 1,297,443 | 1,163,610 | |||||||||
Savings |
1,624,786 | 1,079,376 | 1,046,011 | |||||||||
Money market |
306,089 | 334,825 | 344,297 | |||||||||
Time |
1,690,723 | 1,475,257 | 1,618,115 | |||||||||
Total deposits |
6,867,263 | 5,462,925 | 5,439,437 | |||||||||
Short-term borrowings |
341,004 | 298,232 | 367,761 | |||||||||
Other borrowings |
443,884 | 421,911 | 578,282 | |||||||||
FDIC true-up liability |
14,090 | | | |||||||||
Accrued expenses and other liabilities |
238,764 | 202,019 | 224,950 | |||||||||
Total liabilities |
7,905,005 | 6,385,087 | 6,610,430 | |||||||||
Shareholders Equity |
||||||||||||
Preferred stock, series A, 1,000 shares authorized, no shares
issued or outstanding |
| | | |||||||||
Common stock, $1 stated value, 150,000 shares authorized,
94,752, 87,183 and 87,172 shares issued and outstanding, respectively |
94,752 | 87,183 | 87,172 | |||||||||
Capital surplus |
834,060 | 748,873 | 748,292 | |||||||||
Retained earnings |
74,312 | 44,018 | 44,404 | |||||||||
Accumulated other comprehensive income (loss), net of tax |
24,571 | (1,269 | ) | 15,816 | ||||||||
Total shareholders equity |
1,027,695 | 878,805 | 895,684 | |||||||||
Total liabilities and shareholders equity |
$ | 8,932,700 | $ | 7,263,892 | $ | 7,506,114 | ||||||
3
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollars and shares in thousands, except per share data) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest Income |
||||||||||||||||
Loans including fees: |
||||||||||||||||
Taxable |
$ | 62,706 | $ | 43,635 | $ | 165,058 | $ | 132,416 | ||||||||
Nontaxable |
2,361 | 2,479 | 7,018 | 7,145 | ||||||||||||
Investment securities, available-for-sale: |
||||||||||||||||
Taxable |
13,197 | 16,470 | 39,730 | 57,021 | ||||||||||||
Nontaxable |
3,331 | 3,620 | 10,172 | 12,700 | ||||||||||||
Investment securities, held-to-maturity, taxable |
5,487 | 6,671 | 18,039 | 16,230 | ||||||||||||
Money market and other interest-earning investments |
87 | 70 | 341 | 371 | ||||||||||||
Total interest income |
87,169 | 72,945 | 240,358 | 225,883 | ||||||||||||
Interest Expense |
||||||||||||||||
Deposits |
9,401 | 11,428 | 28,989 | 37,971 | ||||||||||||
Short-term borrowings |
132 | 132 | 390 | 527 | ||||||||||||
Other borrowings |
5,044 | 7,217 | 14,701 | 22,946 | ||||||||||||
Total interest expense |
14,577 | 18,777 | 44,080 | 61,444 | ||||||||||||
Net interest income |
72,592 | 54,168 | 196,278 | 164,439 | ||||||||||||
Provision for loan losses |
(82 | ) | 6,400 | 6,437 | 23,681 | |||||||||||
Net interest income after provision for loan losses |
72,674 | 47,768 | 189,841 | 140,758 | ||||||||||||
Noninterest Income |
||||||||||||||||
Wealth management fees |
5,094 | 3,847 | 15,521 | 12,097 | ||||||||||||
Service charges on deposit accounts |
14,048 | 12,411 | 38,062 | 37,507 | ||||||||||||
ATM fees |
6,766 | 5,821 | 18,736 | 17,278 | ||||||||||||
Mortgage banking revenue |
699 | 644 | 2,560 | 1,765 | ||||||||||||
Insurance premiums and commissions |
8,335 | 8,691 | 27,916 | 27,809 | ||||||||||||
Investment product fees |
2,977 | 2,325 | 8,504 | 6,613 | ||||||||||||
Company-owned life insurance |
1,393 | 1,034 | 3,863 | 3,059 | ||||||||||||
Net securities gains |
2,861 | 3,281 | 5,026 | 12,792 | ||||||||||||
Total other-than-temporary impairment losses |
(140 | ) | (39 | ) | (1,872 | ) | (4,441 | ) | ||||||||
Loss recognized in other comprehensive income |
140 | | 1,373 | 1,133 | ||||||||||||
Impairment losses recognized in earnings |
| (39 | ) | (499 | ) | (3,308 | ) | |||||||||
Gain on derivatives |
149 | 370 | 702 | 1,386 | ||||||||||||
Gain on sale leaseback transactions |
1,636 | 1,636 | 4,909 | 4,815 | ||||||||||||
Change in FDIC indemnification asset |
535 | | 535 | | ||||||||||||
Other income |
2,833 | 1,958 | 7,901 | 6,132 | ||||||||||||
Total noninterest income |
47,326 | 41,979 | 133,736 | 127,945 | ||||||||||||
Noninterest Expense |
||||||||||||||||
Salaries and employee benefits |
52,325 | 41,696 | 139,930 | 125,214 | ||||||||||||
Occupancy |
13,328 | 11,723 | 37,826 | 35,781 | ||||||||||||
Equipment |
2,878 | 2,623 | 8,720 | 8,049 | ||||||||||||
Marketing |
1,294 | 1,527 | 4,193 | 4,274 | ||||||||||||
Data processing |
5,703 | 5,124 | 17,538 | 16,273 | ||||||||||||
Communication |
2,529 | 2,329 | 7,507 | 7,489 | ||||||||||||
Professional fees |
5,905 | 1,600 | 10,462 | 5,477 | ||||||||||||
Loan expense |
1,139 | 980 | 3,351 | 2,996 | ||||||||||||
Supplies |
646 | 710 | 2,191 | 2,179 | ||||||||||||
Loss on extinguishment of debt |
| 870 | | 2,274 | ||||||||||||
FDIC assessment |
1,657 | 2,077 | 5,621 | 6,201 | ||||||||||||
Amortization of intangibles |
2,106 | 1,501 | 5,868 | 4,627 | ||||||||||||
Other expense |
5,648 | 3,342 | 11,634 | 10,199 | ||||||||||||
Total noninterest expense |
95,158 | 76,102 | 254,841 | 231,033 | ||||||||||||
Income before income taxes |
24,842 | 13,645 | 68,736 | 37,670 | ||||||||||||
Income tax expense |
8,045 | 1,749 | 18,490 | 5,182 | ||||||||||||
Net income |
$ | 16,797 | $ | 11,896 | $ | 50,246 | $ | 32,488 | ||||||||
Net income per common share basic |
$ | 0.18 | $ | 0.13 | $ | 0.53 | $ | 0.37 | ||||||||
Net income per common share diluted |
0.18 | 0.13 | 0.53 | 0.37 | ||||||||||||
Weighted average number of common shares outstandingbasic |
94,492 | 86,795 | 94,468 | 86,778 | ||||||||||||
Weighted average number of common shares outstandingdiluted |
94,785 | 86,931 | 94,722 | 86,890 | ||||||||||||
Dividends per common share |
$ | 0.07 | $ | 0.07 | $ | 0.21 | $ | 0.21 |
4
Accumulated | ||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||
Common | Capital | Retained | Comprehensive | Shareholders | Comprehensive | |||||||||||||||||||
(dollars and shares in thousands) | Stock | Surplus | Earnings | Income (Loss) | Equity | Income | ||||||||||||||||||
Balance, December 31, 2009 |
$ | 87,182 | $ | 746,775 | $ | 30,235 | $ | (20,366 | ) | $ | 843,826 | |||||||||||||
Comprehensive income |
||||||||||||||||||||||||
Net income |
| | 32,488 | | 32,488 | $ | 32,488 | |||||||||||||||||
Other comprehensive income (1) |
||||||||||||||||||||||||
Change in unrealized gain (loss) on
securities available for sale, net of
reclassification and tax |
| | | 29,295 | 29,295 | 29,295 | ||||||||||||||||||
Transferred securities, net of tax |
| | | 5,110 | 5,110 | 5,110 | ||||||||||||||||||
Reclassification adjustment on
cash flows hedges, net of tax |
| | | 845 | 845 | 845 | ||||||||||||||||||
Net loss, settlement cost and
amortization of net (gain) loss on
defined benefit pension plans, net of tax |
| | | 932 | 932 | 932 | ||||||||||||||||||
Total comprehensive income |
$ | 68,670 | ||||||||||||||||||||||
Dividends common stock |
| | (18,268 | ) | | (18,268 | ) | |||||||||||||||||
Common stock issued |
13 | 123 | | | 136 | |||||||||||||||||||
Common stock repurchased |
(41 | ) | (442 | ) | | | (483 | ) | ||||||||||||||||
Stock based compensation expense |
| 1,702 | | | 1,702 | |||||||||||||||||||
Stock activity under incentive comp plans |
18 | 134 | (51 | ) | | 101 | ||||||||||||||||||
Balance, September 30, 2010 |
$ | 87,172 | $ | 748,292 | $ | 44,404 | $ | 15,816 | $ | 895,684 | ||||||||||||||
Balance, December 31, 2010 |
$ | 87,183 | $ | 748,873 | $ | 44,018 | $ | (1,269 | ) | $ | 878,805 | |||||||||||||
Comprehensive income |
||||||||||||||||||||||||
Net income |
| | 50,246 | | 50,246 | $ | 50,246 | |||||||||||||||||
Other comprehensive income (1) |
||||||||||||||||||||||||
Change in unrealized gain (loss) on
securities available for sale, net of
reclassification and tax |
| | | 25,222 | 25,222 | 25,222 | ||||||||||||||||||
Transferred securities, net of tax |
| | | (783 | ) | (783 | ) | (783 | ) | |||||||||||||||
Reclassification adjustment on
cash flows hedges, net of tax |
| | | (481 | ) | (481 | ) | (481 | ) | |||||||||||||||
Net loss, settlement cost and
amortization of net (gain) loss on
defined benefit pension plans, net of tax |
| | | 1,882 | 1,882 | 1,882 | ||||||||||||||||||
Total comprehensive income |
$ | 76,086 | ||||||||||||||||||||||
Acquisition Monroe Bancorp |
7,575 | 82,495 | | | 90,070 | |||||||||||||||||||
Dividends common stock |
| | (19,889 | ) | | (19,889 | ) | |||||||||||||||||
Common stock issued |
15 | 151 | | | 166 | |||||||||||||||||||
Common stock repurchased |
(33 | ) | (308 | ) | | | (341 | ) | ||||||||||||||||
Stock based compensation expense |
| 2,551 | | | 2,551 | |||||||||||||||||||
Stock activity under incentive comp plans |
12 | 298 | (63 | ) | | 247 | ||||||||||||||||||
Balance, September 30, 2011 |
$ | 94,752 | $ | 834,060 | $ | 74,312 | $ | 24,571 | $ | 1,027,695 | ||||||||||||||
(1) | See Note 5 to the consolidated financial statements. |
5
Nine Months Ended | ||||||||
September 30, | ||||||||
(dollars in thousands) | 2011 | 2010 | ||||||
Cash Flows From Operating Activities |
||||||||
Net income |
$ | 50,246 | $ | 32,488 | ||||
Adjustments to reconcile net income to cash provided by operating activities: |
||||||||
Depreciation |
7,269 | 6,948 | ||||||
Amortization and impairment of other intangible assets |
5,868 | 4,627 | ||||||
Net premium amortization on investment securities |
8,060 | 4,860 | ||||||
Change in FDIC indemnification asset |
(535 | ) | | |||||
Stock-based compensation expense |
2,551 | 1,702 | ||||||
Provision for loan losses |
6,437 | 23,681 | ||||||
Net securities gains |
(5,026 | ) | (12,792 | ) | ||||
Impairment on available-for-sale securities |
499 | 3,308 | ||||||
Gain on sale leasebacks |
(4,909 | ) | (4,815 | ) | ||||
Gain on derivatives |
(702 | ) | (1,386 | ) | ||||
Net gains on sales and write-downs of loans and other assets |
(1,459 | ) | (1,131 | ) | ||||
Loss on extinguishment of debt |
| 2,274 | ||||||
Increase in cash surrender value of company owned life insurance |
(3,836 | ) | (1,333 | ) | ||||
Residential real estate loans originated for sale |
(70,232 | ) | (44,404 | ) | ||||
Proceeds from sale of residential real estate loans |
79,089 | 59,635 | ||||||
Decrease in interest receivable |
5,812 | 4,964 | ||||||
Decrease in other assets |
17,220 | 4,529 | ||||||
Increase (decrease) in accrued expenses and other liabilities |
15,838 | 1,380 | ||||||
Total adjustments |
61,944 | 52,047 | ||||||
Net cash flows provided by operating activities |
112,190 | 84,535 | ||||||
Cash Flows From Investing Activities |
||||||||
Cash and cash equivalents of acquired banks |
398,558 | | ||||||
Purchase of trust assets |
(1,301 | ) | | |||||
Net cash paid in FDIC-assisted transaction |
(151,264 | ) | | |||||
Purchases of investment securities available-for-sale |
(490,086 | ) | (873,737 | ) | ||||
Purchases of investment securities held-to-maturity |
| (255,828 | ) | |||||
Proceeds from the call/repurchase of FHLB stock |
14,587 | | ||||||
Proceeds from maturities, prepayments and calls of investment securities available-for-sale |
379,727 | 752,062 | ||||||
Proceeds from sales of investment securities available-for-sale |
454,110 | 339,629 | ||||||
Proceeds from maturities, prepayments and calls of investment securities held-to-maturity |
147,050 | 37,376 | ||||||
Proceeds from sale of loans |
4,743 | 3,377 | ||||||
Net principal collected from customers |
105,354 | 163,149 | ||||||
Proceeds from sale of premises and equipment and other assets |
413 | 17 | ||||||
Proceeds from sale leaseback of real estate |
| 3,697 | ||||||
Purchases of premises and equipment |
(4,184 | ) | (6,215 | ) | ||||
Net cash flows provided by investing activities |
857,707 | 163,527 | ||||||
Cash Flows From Financing Activities |
||||||||
Net increase (decrease) in deposits and short-term borrowings: |
||||||||
Noninterest-bearing demand deposits |
129,007 | 79,061 | ||||||
Savings, NOW and money market deposits |
(59,887 | ) | (153,673 | ) | ||||
Time deposits |
(762,052 | ) | (389,439 | ) | ||||
Short-term borrowings |
(27,411 | ) | 36,617 | |||||
Payments for maturities on other borrowings |
(725 | ) | (75,674 | ) | ||||
Proceeds from issuance of other borrowings |
| 50,000 | ||||||
Payments related to retirement of debt |
(211,228 | ) | (101,356 | ) | ||||
Cash dividends paid on common stock |
(19,889 | ) | (18,268 | ) | ||||
Common stock repurchased |
(341 | ) | (483 | ) | ||||
Proceeds from exercise of stock options, including tax benefit |
140 | 12 | ||||||
Common stock issued |
166 | 136 | ||||||
Net cash flows used in financing activities |
(952,220 | ) | (573,067 | ) | ||||
Net increase (decrease) in cash and cash equivalents |
17,677 | (325,005 | ) | |||||
Cash and cash equivalents at beginning of period |
251,552 | 497,276 | ||||||
Cash and cash equivalents at end of period |
$ | 269,229 | $ | 172,271 | ||||
Supplemental cash flow information: |
||||||||
Total interest paid |
$ | 44,814 | $ | 62,181 | ||||
Total taxes paid (net of refunds) |
$ | 4,605 | $ | (2,775 | ) |
6
7
8
(dollars in thousands) | ||||
Assets Acquired |
||||
Cash and cash equivalents |
$ | 314,954 | ||
Investment securities available for sale |
452,478 | |||
Federal Home Loan Bank stock, at cost |
15,226 | |||
Federal Reserve Bank stock, at cost |
1,222 | |||
Residential loans held for sale |
1,690 | |||
Loans covered |
727,330 | |||
Loans non-covered |
56,828 | |||
Premises and equipment |
10,474 | |||
Other real estate owned |
34,055 | |||
Accrued interest receivable |
4,751 | |||
Goodwill |
29,673 | |||
Other intangible assets |
4,291 | |||
FDIC indemnification asset |
167,948 | |||
Other assets |
11,169 | |||
Assets acquired |
$ | 1,832,089 | ||
Liabilities Assumed |
||||
Deposits |
$ | 1,443,209 | ||
Short-term borrowings |
7,654 | |||
Other borrowings |
192,895 | |||
FDIC settlement payable |
161,520 | |||
Other liabilities |
26,811 | |||
Liabilities assumed |
$ | 1,832,089 | ||
9
Cash and cash equivalents |
$ | 83,604 | ||
Investment securities |
153,594 | |||
Loans |
453,366 | |||
Premises and equipment |
19,738 | |||
Accrued interest receivable |
1,804 | |||
Company-owned life insurance |
17,206 | |||
Other assets |
41,538 | |||
Deposits |
(653,813 | ) | ||
Short-term borrowings |
(62,529 | ) | ||
Other borrowings |
(37,352 | ) | ||
Accrued expenses and other liabilities |
(6,000 | ) | ||
Net tangible assets acquired |
11,156 | |||
Definite-lived intangible assets acquired |
10,485 | |||
Goodwill |
68,429 | |||
Purchase price |
$ | 90,070 | ||
10
Estimated | ||||||||
Fair Value | Estimated | |||||||
(in millions) | Useful Lives (Years) | |||||||
Core deposit intangible |
$ | 8.2 | 10 | |||||
Trust customer relationship intangible |
$ | 2.3 | 12 |
11
(dollars and shares in thousands, | Three Months Ended | Three Months Ended | ||||||
except per share data) | September 30, 2011 | September 30, 2010 | ||||||
Basic Earnings Per Share |
||||||||
Net income |
$ | 16,797 | $ | 11,896 | ||||
Weighted average common shares
outstanding |
94,492 | 86,795 | ||||||
Basic Earnings Per Share |
$ | 0.18 | $ | 0.13 | ||||
Diluted Earnings Per Share |
||||||||
Net income |
$ | 16,797 | $ | 11,896 | ||||
Weighted average common shares
outstanding |
94,492 | 86,795 | ||||||
Effect of dilutive securities: |
||||||||
Restricted stock (1) |
277 | 126 | ||||||
Stock options (2) |
16 | 10 | ||||||
Weighted average shares outstanding |
94,785 | 86,931 | ||||||
Diluted Earnings Per Share |
$ | 0.18 | $ | 0.13 | ||||
(dollars and shares in thousands, | Nine Months Ended | Nine Months Ended | ||||||
except per share data) | September 30, 2011 | September 30, 2010 | ||||||
Basic Earnings Per Share |
||||||||
Net income |
$ | 50,246 | $ | 32,488 | ||||
Weighted average common shares
outstanding |
94,468 | 86,778 | ||||||
Basic Earnings Per Share |
$ | 0.53 | $ | 0.37 | ||||
Diluted Earnings Per Share |
||||||||
Net income |
$ | 50,246 | $ | 32,488 | ||||
Weighted average common shares
outstanding |
94,468 | 86,778 | ||||||
Effect of dilutive securities: |
||||||||
Restricted stock (1) |
233 | 101 | ||||||
Stock options (2) |
21 | 11 | ||||||
Weighted average shares outstanding |
94,722 | 86,890 | ||||||
Diluted Earnings Per Share |
$ | 0.53 | $ | 0.37 | ||||
(1) | 2 and 0 shares of restricted stock and restricted stock units were not included in the computation of net income per diluted share for the third quarter ended September 30, 2011 and 2010, respectively, because the effect would be antidilutive. 5 and 70 shares of restricted stock and restricted stock units were not included in the computation of net income per diluted share for the nine months ended September 30, 2011 and 2010, respectively, because the effect would be antidilutive. | |
(2) | Options to purchase 4,626 shares and 6,001 shares outstanding at September 30, 2011 and 2010, respectively, were not included in the computation of net income per diluted share for the third quarter ended September 30, 2011 and 2010, respectively, because the exercise price of these options was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. Options to purchase 4,605 and 6,001 shares outstanding at September 30, 2011 and 2010, respectively, were not included in the computation of net income per diluted share for the nine months ended September 30, 2011 and 2010, respectively, because the exercise price of these options was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. |
12
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income |
$ | 16,797 | $ | 11,896 | $ | 50,246 | $ | 32,488 | ||||||||
Other comprehensive income |
||||||||||||||||
Change in securities available for sale: |
||||||||||||||||
Unrealized holding gains arising during the period |
16,032 | 26,709 | 47,324 | 68,779 | ||||||||||||
Reclassification for securities transferred to held-to-maturity |
| | | (9,371 | ) | |||||||||||
Reclassification adjustment for securities gains realized in income |
(2,861 | ) | (3,281 | ) | (5,026 | ) | (12,792 | ) | ||||||||
Other-than-temporary-impairment on available-for-sale debt securities
recorded in other comprehensive income |
(140 | ) | | (1,373 | ) | (1,133 | ) | |||||||||
Other-than-temporary-impairment on available-for-sale debt securities
associated with credit loss realized in income |
| 39 | 499 | 3,308 | ||||||||||||
Income tax effect |
(5,149 | ) | (9,176 | ) | (16,202 | ) | (19,496 | ) | ||||||||
Change in securities held-to-maturity: |
||||||||||||||||
Fair value adjustment for securities transferred from available-for-sale |
| | | 9,371 | ||||||||||||
Amortization of fair value previously recognized into accumulated
other comprehensive income |
(337 | ) | (416 | ) | (1,304 | ) | (860 | ) | ||||||||
Income tax effect |
134 | 166 | 521 | (3,401 | ) | |||||||||||
Cash flow hedges: |
||||||||||||||||
Net unrealized derivative gains (losses) on cash flow hedges |
(412 | ) | 201 | (1,021 | ) | 1,190 | ||||||||||
Reclassification adjustment on cash flow hedges |
72 | 72 | 216 | 216 | ||||||||||||
Income tax effect |
137 | (109 | ) | 324 | (561 | ) | ||||||||||
Defined benefit pension plans: |
||||||||||||||||
Amortization of net loss recognized in income |
1,154 | 750 | 3,137 | 1,552 | ||||||||||||
Income tax effect |
(461 | ) | (299 | ) | (1,255 | ) | (620 | ) | ||||||||
Total other comprehensive income |
8,169 | 14,656 | 25,840 | 36,182 | ||||||||||||
Comprehensive income |
$ | 24,966 | $ | 26,552 | $ | 76,086 | $ | 68,670 | ||||||||
13
AOCI at | Other | AOCI at | ||||||||||
December 31, | Comprehensive | September 30, | ||||||||||
(dollars in thousands) | 2010 | Income | 2011 | |||||||||
Unrealized gains on available-for-sale securities |
$ | 31,962 | $ | 26,058 | $ | 58,020 | ||||||
Unrealized losses on securities for which other-
than-temporary-impairment has been recognized |
(28,173 | ) | (836 | ) | (29,009 | ) | ||||||
Unrealized gains (losses) on
held-to-maturity securities |
5,667 | (783 | ) | 4,884 | ||||||||
Unrecognized gain (loss) on cash flow hedges |
846 | (481 | ) | 365 | ||||||||
Defined benefit pension plans |
(11,571 | ) | 1,882 | (9,689 | ) | |||||||
Accumulated other comprehensive income (loss) |
$ | (1,269 | ) | $ | 25,840 | $ | 24,571 | |||||
AOCI at | Other | AOCI at | ||||||||||
December 31, | Comprehensive | September 30, | ||||||||||
(dollars in thousands) | 2009 | Income | 2010 | |||||||||
Unrealized gains on available-for-sale securities |
$ | 19,789 | $ | 29,967 | $ | 49,756 | ||||||
Unrealized losses on securities for which other-
than-temporary-impairment has been recognized |
(27,501 | ) | (672 | ) | (28,173 | ) | ||||||
Unrealized gains (losses) on
held-to-maturity securities |
812 | 5,110 | 5,922 | |||||||||
Unrecognized gain on cash flow hedges |
187 | 845 | 1,032 | |||||||||
Defined benefit pension plans |
(13,653 | ) | 932 | (12,721 | ) | |||||||
Accumulated other comprehensive income (loss) |
$ | (20,366 | ) | $ | 36,182 | $ | 15,816 | |||||
14
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
(dollars in thousands) | Cost | Gains | Losses | Value | ||||||||||||
September 30, 2011 |
||||||||||||||||
Available-for-sale |
||||||||||||||||
U.S. Treasury |
$ | 65,260 | $ | 691 | $ | | $ | 65,951 | ||||||||
U.S. Government-sponsored entities and agencies |
178,387 | 2,547 | | 180,934 | ||||||||||||
Mortgage-backed securities Agency |
1,312,193 | 34,705 | (364 | ) | 1,346,534 | |||||||||||
Mortgage-backed securities Non-agency |
98,570 | 532 | (4,051 | ) | 95,051 | |||||||||||
States and political subdivisions |
365,305 | 26,051 | (154 | ) | 391,202 | |||||||||||
Pooled trust preferrred securities |
27,346 | | (19,816 | ) | 7,530 | |||||||||||
Other securities |
158,224 | 9,684 | (2,021 | ) | 165,887 | |||||||||||
Total available-for-sale securities |
$ | 2,205,285 | $ | 74,210 | $ | (26,406 | ) | $ | 2,253,089 | |||||||
Held-to-maturity |
||||||||||||||||
U.S. Government-sponsored entities and agencies |
$ | 177,963 | $ | 11,654 | $ | | $ | 189,617 | ||||||||
Mortgage-backed securities Agency |
91,622 | 3,750 | | 95,372 | ||||||||||||
States and political subdivisions |
216,643 | 8,848 | (107 | ) | 225,384 | |||||||||||
Other securities |
7,054 | | | 7,054 | ||||||||||||
Total held-to-maturity securities |
$ | 493,282 | $ | 24,252 | $ | (107 | ) | $ | 517,427 | |||||||
December 31, 2010 |
||||||||||||||||
Available-for-sale |
||||||||||||||||
U.S. Treasury |
$ | 62,206 | $ | 371 | $ | (27 | ) | $ | 62,550 | |||||||
U.S. Government-sponsored entities and agencies |
315,922 | 1,612 | (2,401 | ) | 315,133 | |||||||||||
Mortgage-backed securities Agency |
922,005 | 22,926 | (485 | ) | 944,446 | |||||||||||
Mortgage-backed securities Non-agency |
134,168 | 1,018 | (8,380 | ) | 126,806 | |||||||||||
States and political subdivisions |
343,970 | 7,503 | (2,549 | ) | 348,924 | |||||||||||
Pooled trust preferrred securities |
27,368 | | (18,968 | ) | 8,400 | |||||||||||
Other securities |
148,203 | 7,816 | (2,056 | ) | 153,963 | |||||||||||
Total available-for-sale securities |
$ | 1,953,842 | $ | 41,246 | $ | (34,866 | ) | $ | 1,960,222 | |||||||
Held-to-maturity |
||||||||||||||||
U.S. Government-sponsored entities and agencies |
$ | 303,265 | $ | 2,247 | $ | (3,703 | ) | $ | 301,809 | |||||||
Mortgage-backed securities Agency |
117,013 | 2,577 | (510 | ) | 119,080 | |||||||||||
States and political subdivisions |
217,381 | 1 | (13,003 | ) | 204,379 | |||||||||||
Other securities |
551 | | (176 | ) | 375 | |||||||||||
Total held-to-maturity securities |
$ | 638,210 | $ | 4,825 | $ | (17,392 | ) | $ | 625,643 | |||||||
15
September 30, 2011 | Weighted | |||||||||||
(dollars in thousands) | Amortized | Fair | Average | |||||||||
Maturity | Cost | Value | Yield | |||||||||
Available-for-sale |
||||||||||||
Within one year |
$ | 172,177 | $ | 175,012 | 3.02 | % | ||||||
One to five years |
1,343,097 | 1,373,701 | 2.62 | |||||||||
Five to ten years |
219,497 | 231,257 | 4.11 | |||||||||
Beyond ten years |
470,514 | 473,119 | 4.92 | |||||||||
Total |
$ | 2,205,285 | $ | 2,253,089 | 3.29 | % | ||||||
Held-to-maturity |
||||||||||||
Within one year |
$ | 4,113 | $ | 4,112 | 1.49 | % | ||||||
One to five years |
96,402 | 100,192 | 3.58 | |||||||||
Five to ten years |
12,505 | 13,259 | 4.05 | |||||||||
Beyond ten years |
380,262 | 399,864 | 4.08 | |||||||||
Total |
$ | 493,282 | $ | 517,427 | 3.96 | % | ||||||
16
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
September 30, 2011 |
||||||||||||||||||||||||
Available-for-Sale |
||||||||||||||||||||||||
Mortgage-backed securities Agency |
$ | 130,244 | $ | (364 | ) | $ | 3 | $ | | $ | 130,247 | $ | (364 | ) | ||||||||||
Mortgage-backed securities Non-agency |
9,685 | (439 | ) | 62,079 | (3,612 | ) | 71,764 | (4,051 | ) | |||||||||||||||
States and political subdivisions |
2,780 | (154 | ) | | | 2,780 | (154 | ) | ||||||||||||||||
Pooled trust preferrred securities |
| | 7,531 | (19,816 | ) | 7,531 | (19,816 | ) | ||||||||||||||||
Other securities |
8,222 | (127 | ) | 6,173 | (1,894 | ) | 14,395 | (2,021 | ) | |||||||||||||||
Total available-for-sale |
$ | 150,931 | $ | (1,084 | ) | $ | 75,786 | $ | (25,322 | ) | $ | 226,717 | $ | (26,406 | ) | |||||||||
Held-to-Maturity |
||||||||||||||||||||||||
States and political subdivisions |
$ | | $ | | $ | 13,324 | $ | (107 | ) | $ | 13,324 | $ | (107 | ) | ||||||||||
Total held-to-maturity |
$ | | $ | | $ | 13,324 | $ | (107 | ) | $ | 13,324 | $ | (107 | ) | ||||||||||
December 31, 2010 |
||||||||||||||||||||||||
Available-for-Sale |
||||||||||||||||||||||||
U.S. Treasury |
$ | 10,944 | $ | (27 | ) | $ | | $ | | $ | 10,944 | $ | (27 | ) | ||||||||||
U.S. Government-sponsored entities
and agencies |
120,404 | (2,401 | ) | | | 120,404 | (2,401 | ) | ||||||||||||||||
Mortgage-backed securities Agency |
160,784 | (485 | ) | 483 | | 161,267 | (485 | ) | ||||||||||||||||
Mortgage-backed securities Non-agency |
13,265 | (1,696 | ) | 79,327 | (6,684 | ) | 92,592 | (8,380 | ) | |||||||||||||||
States and political subdivisions |
94,448 | (2,549 | ) | | | 94,448 | (2,549 | ) | ||||||||||||||||
Pooled trust preferrred securities |
| | 8,400 | (18,968 | ) | 8,400 | (18,968 | ) | ||||||||||||||||
Other securities |
12,283 | (206 | ) | 6,204 | (1,850 | ) | 18,487 | (2,056 | ) | |||||||||||||||
Total available-for-sale |
$ | 412,128 | $ | (7,364 | ) | $ | 94,414 | $ | (27,502 | ) | $ | 506,542 | $ | (34,866 | ) | |||||||||
Held-to-Maturity |
||||||||||||||||||||||||
U.S. Government-sponsored entities
and agencies |
$ | 111,975 | $ | (3,703 | ) | $ | | $ | | $ | 111,975 | $ | (3,703 | ) | ||||||||||
Mortgage-backed securities Agency |
67,837 | (510 | ) | | | 67,837 | (510 | ) | ||||||||||||||||
States and political subdivisions |
203,093 | (13,003 | ) | | | 203,093 | (13,003 | ) | ||||||||||||||||
Other securities |
| | 375 | (176 | ) | 375 | (176 | ) | ||||||||||||||||
Total held-to-maturity |
$ | 382,905 | $ | (17,216 | ) | $ | 375 | $ | (176 | ) | $ | 383,280 | $ | (17,392 | ) | |||||||||
17
18
19
Actual | Expected | Excess | ||||||||||||||||||||||||||||||||||||||
Deferrals and | Defaults as | Subordination | ||||||||||||||||||||||||||||||||||||||
# of Issuers | Defaults as a | a % of | as a % | |||||||||||||||||||||||||||||||||||||
Trust preferred securities | Lowest | Unrealized | Realized | Currently | Percent of | Remaining | of Current | |||||||||||||||||||||||||||||||||
September 30, 2011 | Credit | Amortized | Fair | Gain/ | Losses | Performing/ | Original | Performing | Performing | |||||||||||||||||||||||||||||||
(Dollars in Thousands) | Class | Rating (1) | Cost | Value | (Loss) | 2011 | Remaining | Collateral | Collateral | Collateral | ||||||||||||||||||||||||||||||
Pooled trust preferred
securities: |
||||||||||||||||||||||||||||||||||||||||
TROPC 2003-1A |
A4L | C | $ | 977 | $ | 198 | $ | (779 | ) | $ | | 18/39 | 41.7 | % | 17.5 | % | 0.0 | % | ||||||||||||||||||||||
MM Community Funding IX |
B-2 | D | 2,076 | 859 | (1,217 | ) | | 16/31 | 41.1 | % | 8.5 | % | 0.0 | % | ||||||||||||||||||||||||||
Reg Div Funding 2004 |
B-2 | D | 4,194 | 690 | (3,504 | ) | | 24/45 | 46.0 | % | 6.8 | % | 0.0 | % | ||||||||||||||||||||||||||
Pretsl XII |
B-1 | C | 2,886 | 1,508 | (1,378 | ) | | 50/77 | 30.4 | % | 6.7 | % | 0.0 | % | ||||||||||||||||||||||||||
Pretsl XV |
B-1 | C | 1,695 | 568 | (1,127 | ) | | 49/72 | 36.4 | % | 10.0 | % | 0.0 | % | ||||||||||||||||||||||||||
Reg Div Funding 2005 |
B-1 | C | 311 | 58 | (253 | ) | | 23/49 | 49.3 | % | 29.0 | % | 0.0 | % | ||||||||||||||||||||||||||
MM Community Funding II |
B | BB | 987 | 959 | (28 | ) | | 5/8 | 4.7 | % | 0.0 | % | 26.9 | % | ||||||||||||||||||||||||||
Pretsl XXVII LTD |
B | CC | 4,835 | 655 | (4,180 | ) | | 33/49 | 28.1 | % | 23.7 | % | 35.6 | % | ||||||||||||||||||||||||||
Trapeza Ser 13A |
A2A | CCC- | 9,385 | 2,035 | (7,350 | ) | | 36/56 | 29.2 | % | 4.2 | % | 39.8 | % | ||||||||||||||||||||||||||
27,346 | 7,530 | (19,816 | ) | | ||||||||||||||||||||||||||||||||||||
Single Issuer trust preferred
securities: |
||||||||||||||||||||||||||||||||||||||||
First Empire Cap (M&T) |
BBB- | 955 | 1,004 | 49 | | |||||||||||||||||||||||||||||||||||
First Empire Cap (M&T) |
BBB- | 2,904 | 3,013 | 109 | | |||||||||||||||||||||||||||||||||||
Fleet Cap Tr V (BOA) |
BB+ | 3,357 | 2,295 | (1,062 | ) | | ||||||||||||||||||||||||||||||||||
JP Morgan Chase Cap XIII |
BBB+ | 4,710 | 3,878 | (832 | ) | | ||||||||||||||||||||||||||||||||||
11,926 | 10,190 | (1,736 | ) | | ||||||||||||||||||||||||||||||||||||
Total |
$ | 39,272 | $ | 17,720 | $ | (21,552 | ) | $ | | |||||||||||||||||||||||||||||||
(1) | Lowest rating for the security provided by any nationally recognized credit rating agency. |
Amount of other-than-temporary | ||||||||||||||||||||
impairment recognized in earnings | ||||||||||||||||||||
Lowest | Three months | Nine months | ||||||||||||||||||
Credit | Amortized | ended | ended | |||||||||||||||||
Vintage | Rating (1) | Cost | September 30, 2011 | September 30, 2011 | ||||||||||||||||
Non-agency mortgage-backed
securities: |
||||||||||||||||||||
FHASI Ser 4 |
2007 | CC | $ | 20,003 | $ | | $ | 340 | ||||||||||||
HALO Ser 1R |
2006 | B | 15,640 | | 16 | |||||||||||||||
RFMSI Ser S10 |
2006 | CC | 4,217 | | 143 | |||||||||||||||
$ | 39,860 | | 499 | |||||||||||||||||
Total other-than-temporary-
impairment recognized in earnings |
$ | | $ | 499 | ||||||||||||||||
(1) | Lowest rating for the security provided by any nationally recognized credit rating agency. |
20
Amount of other-than-temporary | ||||||||||||||||||||
impairment recognized in earnings | ||||||||||||||||||||
Lowest | Three months | Nine months | ||||||||||||||||||
Credit | Amortized | ended | ended | |||||||||||||||||
Vintage | Rating (1) | Cost | September 30, 2010 | September 30, 2010 | ||||||||||||||||
Non-agency mortgage-backed
securities: |
||||||||||||||||||||
BAFC Ser 4 |
2007 | CCC | $ | 14,026 | $ | | $ | 79 | ||||||||||||
CWALT Ser 73CB |
2005 | CCC | 6,606 | | 207 | |||||||||||||||
CWALT Ser 73CB |
2005 | CCC | 6,923 | | 427 | |||||||||||||||
CWHL 2006-10 |
2006 | C | 10,030 | | 309 | |||||||||||||||
CWHL 2005-20 |
2005 | B- | 9,734 | | 39 | |||||||||||||||
FHASI Ser 4 |
2007 | CCC | 21,617 | 37 | 629 | |||||||||||||||
RFMSI Ser S9 |
2006 | CC | 32,070 | | 923 | |||||||||||||||
RFMSI Ser S10 |
2006 | CC | 4,360 | 2 | 76 | |||||||||||||||
RALI QS2 |
2006 | C | 6,565 | | 278 | |||||||||||||||
RFMSI S1 |
2006 | CCC | 5,127 | | 30 | |||||||||||||||
117,058 | 39 | 2,997 | ||||||||||||||||||
Pooled trust preferred
securities: |
||||||||||||||||||||
TROPC |
2003 | C | 1,283 | | 146 | |||||||||||||||
MM Community Funding IX |
2003 | C | 2,107 | | 165 | |||||||||||||||
3,390 | | 311 | ||||||||||||||||||
Total other-than-temporary-
impairment recognized in earnings |
$ | 39 | $ | 3,308 | ||||||||||||||||
(1) | Lowest rating for the security provided by any nationally recognized credit rating agency. |
21
Amount of other-than-temporary | ||||||||||||||||||||||||||||
impairment recognized in earnings | ||||||||||||||||||||||||||||
Lowest | Nine months | Twelve months ended | ||||||||||||||||||||||||||
Credit | Amortized | September 30, | December 31, | Life-to | ||||||||||||||||||||||||
Vintage | Rating (1) | Cost | 2011 | 2010 | 2009 | date | ||||||||||||||||||||||
Non-agency mortgage-backed securities: |
||||||||||||||||||||||||||||
BAFC Ser 4 |
2007 | CCC | $ | 14,026 | $ | | $ | 79 | $ | 63 | $ | 142 | ||||||||||||||||
CWALT Ser 73CB |
2005 | CC | 3,842 | | 207 | 83 | 290 | |||||||||||||||||||||
CWALT Ser 73CB |
2005 | CC | 4,791 | | 427 | 182 | 609 | |||||||||||||||||||||
CWHL 2006-10 (3) |
2006 | | | | 309 | 762 | 1,071 | |||||||||||||||||||||
CWHL 2005-20 |
2005 | CC | 5,332 | | 39 | 72 | 111 | |||||||||||||||||||||
FHASI Ser 4 |
2007 | CC | 20,003 | 340 | 629 | 223 | 1,192 | |||||||||||||||||||||
HALO Ser 1R |
2006 | B | 15,640 | 16 | | | 16 | |||||||||||||||||||||
RFMSI Ser S9 (2) |
2006 | | | | 923 | 1,880 | 2,803 | |||||||||||||||||||||
RFMSI Ser S10 |
2006 | CC | 4,217 | 143 | 76 | 249 | 468 | |||||||||||||||||||||
RALI QS2 (2) |
2006 | | | | 278 | 739 | 1,017 | |||||||||||||||||||||
RFMSI S1 |
2006 | CCC | 2,802 | | 30 | 176 | 206 | |||||||||||||||||||||
70,653 | 499 | 2,997 | 4,429 | 7,925 | ||||||||||||||||||||||||
Pooled trust preferred securities: |
||||||||||||||||||||||||||||
TROPC |
2003 | C | 977 | | 444 | 3,517 | 3,961 | |||||||||||||||||||||
MM Community Funding IX |
2003 | D | 2,076 | | 165 | 2,612 | 2,777 | |||||||||||||||||||||
Reg Div Funding |
2004 | D | 4,194 | | 321 | 5,199 | 5,520 | |||||||||||||||||||||
Pretsl XII |
2003 | C | 2,886 | | | 1,897 | 1,897 | |||||||||||||||||||||
Pretsl XV |
2004 | C | 1,695 | | | 3,374 | 3,374 | |||||||||||||||||||||
Reg Div Funding |
2005 | C | 311 | | | 3,767 | 3,767 | |||||||||||||||||||||
12,139 | | 930 | 20,366 | 21,296 | ||||||||||||||||||||||||
Total other-than-temporary-
impairment recognized in earnings |
$ | 499 | $ | 3,927 | $ | 24,795 | $ | 29,221 | ||||||||||||||||||||
(1) | Lowest rating for the security provided by any nationally recognized credit rating agency. | |
(2) | Sold during fourth quarter 2010. | |
(3) | Sold during first quarter 2011. |
22
September 30, | December 31, | |||||||
(dollars in thousands) | 2011 | 2010 | ||||||
Commercial (1) |
$ | 1,246,289 | $ | 1,211,399 | ||||
Commercial real estate: |
||||||||
Construction |
50,116 | 101,016 | ||||||
Other |
1,078,258 | 841,379 | ||||||
Residential real estate |
865,951 | 664,705 | ||||||
Consumer credit: |
||||||||
Heloc |
245,686 | 248,293 | ||||||
Auto |
487,983 | 497,102 | ||||||
Other |
165,777 | 179,557 | ||||||
Covered loans |
711,266 | | ||||||
Total loans |
4,851,326 | 3,743,451 | ||||||
Allowance for loan losses |
(65,219 | ) | (72,309 | ) | ||||
Allowance for loan losses covered loans |
(303 | ) | | |||||
Net loans |
$ | 4,785,804 | $ | 3,671,142 | ||||
(1) | Includes direct finance leases of $87.0 million at September 30, 2011 and $106.1 million at December 31, 2010. |
23
24
Commercial | ||||||||||||||||||||||||
(dollars in thousands) | Commercial | Real Estate | Consumer | Residential | Unallocated | Total | ||||||||||||||||||
2011 |
||||||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance |
$ | 26,029 | $ | 32,490 | $ | 8,558 | $ | 3,112 | | $ | 70,189 | |||||||||||||
Charge-offs |
(2,175 | ) | (2,834 | ) | (2,161 | ) | (367 | ) | | (7,537 | ) | |||||||||||||
Recoveries |
878 | 305 | 1,400 | 66 | | 2,649 | ||||||||||||||||||
Provision |
(864 | ) | 315 | 130 | 337 | | (82 | ) | ||||||||||||||||
Ending balance |
$ | 23,868 | $ | 30,276 | $ | 7,927 | $ | 3,148 | | $ | 65,219 | |||||||||||||
Commercial | ||||||||||||||||||||||||
(dollars in thousands) | Commercial | Real Estate | Consumer | Residential | Unallocated | Total | ||||||||||||||||||
2010 |
||||||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance |
$ | 28,559 | $ | 27,267 | $ | 12,877 | $ | 3,160 | | $ | 71,863 | |||||||||||||
Charge-offs |
(797 | ) | (2,708 | ) | (4,435 | ) | (248 | ) | | (8,188 | ) | |||||||||||||
Recoveries |
79 | 444 | 1,541 | 10 | | 2,074 | ||||||||||||||||||
Provision |
(932 | ) | 4,423 | 2,983 | (74 | ) | | 6,400 | ||||||||||||||||
Ending balance |
$ | 26,909 | $ | 29,426 | $ | 12,966 | $ | 2,848 | | $ | 72,149 | |||||||||||||
Commercial | ||||||||||||||||||||||||
(dollars in thousands) | Commercial | Real Estate | Consumer | Residential | Unallocated | Total | ||||||||||||||||||
2011 |
||||||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance |
$ | 26,204 | $ | 32,654 | $ | 11,142 | $ | 2,309 | | $ | 72,309 | |||||||||||||
Charge-offs |
(7,344 | ) | (5,815 | ) | (8,014 | ) | (1,540 | ) | | (22,713 | ) | |||||||||||||
Recoveries |
3,013 | 1,289 | 4,726 | 158 | | 9,186 | ||||||||||||||||||
Provision |
1,995 | 2,148 | 73 | 2,221 | | 6,437 | ||||||||||||||||||
Ending balance |
$ | 23,868 | $ | 30,276 | $ | 7,927 | $ | 3,148 | | $ | 65,219 | |||||||||||||
Commercial | ||||||||||||||||||||||||
(dollars in thousands) | Commercial | Real Estate | Consumer | Residential | Unallocated | Total | ||||||||||||||||||
2010 |
||||||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance |
$ | 26,869 | $ | 27,138 | $ | 13,853 | $ | 1,688 | | $ | 69,548 | |||||||||||||
Charge-offs |
(8,788 | ) | (7,549 | ) | (12,646 | ) | (1,924 | ) | | (30,907 | ) | |||||||||||||
Recoveries |
3,537 | 1,589 | 4,634 | 67 | | 9,827 | ||||||||||||||||||
Provision |
5,291 | 8,248 | 7,125 | 3,017 | | 23,681 | ||||||||||||||||||
Ending balance |
$ | 26,909 | $ | 29,426 | $ | 12,966 | $ | 2,848 | | $ | 72,149 | |||||||||||||
25
Commercial | ||||||||||||||||||||||||
(dollars in thousands) | Commercial | Real Estate | Consumer | Residential | Unallocated | Total | ||||||||||||||||||
September 30, 2011 |
||||||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Ending balance: individually
evaluated for impairment |
$ | 8,803 | $ | 7,233 | | | | $ | 16,036 | |||||||||||||||
Ending balance: collectively
evaluated for impairment |
$ | 14,977 | $ | 22,752 | $ | 7,927 | $ | 3,148 | | $ | 48,804 | |||||||||||||
Ending balance: loans acquired
with deteriorated credit quality |
$ | 88 | $ | 291 | | | | $ | 379 | |||||||||||||||
Loans and leases outstanding: |
||||||||||||||||||||||||
Ending balance |
$ | 1,246,289 | $ | 1,128,374 | $ | 899,446 | $ | 865,951 | | $ | 4,140,060 | |||||||||||||
Ending balance: individually
evaluated for impairment |
$ | 34,296 | $ | 47,398 | | | | $ | 81,694 | |||||||||||||||
Ending balance: collectively
evaluated for impairment |
$ | 1,210,155 | $ | 1,057,039 | $ | 899,307 | $ | 865,755 | | $ | 4,032,256 | |||||||||||||
Ending balance: loans acquired
with deteriorated credit
quality (1) |
$ | 1,838 | $ | 23,937 | $ | 139 | $ | 196 | | $ | 26,110 | |||||||||||||
(1) | Includes $166.4 million of revolving credits not accounted for under ASC 310-30. |
Commercial | ||||||||||||||||||||||||
(dollars in thousands) | Commercial | Real Estate | Consumer | Residential | Unallocated | Total | ||||||||||||||||||
December 31, 2010 |
||||||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Ending balance: individually
evaluated for impairment |
$ | 6,063 | $ | 8,514 | | | | $ | 14,577 | |||||||||||||||
Ending balance: collectively
evaluated for impairment |
$ | 20,141 | $ | 24,140 | $ | 11,142 | $ | 2,309 | | $ | 57,732 | |||||||||||||
Loans and leases outstanding: |
||||||||||||||||||||||||
Ending balance |
$ | 1,211,399 | $ | 942,395 | $ | 924,952 | $ | 664,705 | | $ | 3,743,451 | |||||||||||||
Ending balance: individually
evaluated for impairment |
$ | 23,944 | $ | 29,377 | | | | $ | 53,321 | |||||||||||||||
Ending balance: collectively
evaluated for impairment |
$ | 1,187,455 | $ | 913,018 | $ | 924,952 | $ | 664,705 | | $ | 3,690,130 | |||||||||||||
26
(dollars in thousands) | ||||||||||||||||||||||||
Corporate Credit | Commercial Real Estate- | Commercial Real Estate- | ||||||||||||||||||||||
Exposure | Commercial | Construction | Other | |||||||||||||||||||||
by Internally | September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||
Assigned Grade | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
Grade: |
||||||||||||||||||||||||
Pass |
$ | 1,110,329 | $ | 1,105,382 | $ | 18,233 | $ | 77,241 | $ | 936,709 | $ | 729,243 | ||||||||||||
Criticized |
45,244 | 38,629 | 13,998 | 16,223 | 39,274 | 29,161 | ||||||||||||||||||
Classified substandard |
52,978 | 41,899 | 11,653 | 7,552 | 35,790 | 52,559 | ||||||||||||||||||
Classified doubtful |
37,738 | 25,489 | 6,232 | | 66,485 | 30,416 | ||||||||||||||||||
Total |
$ | 1,246,289 | $ | 1,211,399 | $ | 50,116 | $ | 101,016 | $ | 1,078,258 | $ | 841,379 | ||||||||||||
September 30, 2011 | Consumer | |||||||||||||||
(dollars in thousands) | Heloc | Auto | Other | Residential | ||||||||||||
Performing |
$ | 244,458 | $ | 485,834 | $ | 164,052 | $ | 856,717 | ||||||||
Nonperforming |
1,228 | 2,149 | 1,725 | 9,234 | ||||||||||||
$ | 245,686 | $ | 487,983 | $ | 165,777 | $ | 865,951 | |||||||||
December 31, 2010 | Consumer | |||||||||||||||
(dollars in thousands) | Heloc | Auto | Other | Residential | ||||||||||||
Performing |
$ | 246,390 | $ | 494,771 | $ | 177,470 | $ | 655,986 | ||||||||
Nonperforming |
1,903 | 2,331 | 2,087 | 8,719 | ||||||||||||
$ | 248,293 | $ | 497,102 | $ | 179,557 | $ | 664,705 | |||||||||
27
Unpaid | ||||||||||||
Recorded | Principal | Related | ||||||||||
(dollars in thousands) | Investment | Balance | Allowance | |||||||||
September 30, 2011 |
||||||||||||
With no related allowance recorded: |
||||||||||||
Commercial |
$ | 15,409 | $ | 20,699 | $ | | ||||||
Commercial Real Estate Construction |
| | | |||||||||
Commercial Real Estate Other |
13,033 | 19,621 | | |||||||||
With an allowance recorded: |
||||||||||||
Commercial |
18,887 | 19,817 | 8,803 | |||||||||
Commercial Real Estate Construction |
| | | |||||||||
Commercial Real Estate Other |
34,365 | 37,743 | 7,233 | |||||||||
Total Commercial |
$ | 81,694 | $ | 97,880 | $ | 16,036 | ||||||
December 31, 2010 |
||||||||||||
With no related allowance recorded: |
||||||||||||
Commercial |
$ | 6,116 | $ | 8,001 | $ | | ||||||
Commercial Real Estate Construction |
| | | |||||||||
Commercial Real Estate Other |
10,554 | 16,781 | | |||||||||
With an allowance recorded: |
||||||||||||
Commercial |
17,828 | 20,341 | 6,063 | |||||||||
Commercial Real Estate Construction |
| | | |||||||||
Commercial Real Estate Other |
18,823 | 19,849 | 8,514 | |||||||||
Total Commercial |
$ | 53,321 | $ | 64,972 | $ | 14,577 | ||||||
Average | Interest | |||||||
Recorded | Income | |||||||
(dollars in thousands) | Investment | Recognized (1) | ||||||
September 30, 2011 |
||||||||
With no related allowance recorded: |
||||||||
Commercial |
$ | 12,081 | $ | 178 | ||||
Commercial Real Estate Construction |
| | ||||||
Commercial Real Estate Other |
11,409 | 64 | ||||||
With an allowance recorded: |
||||||||
Commercial |
22,118 | 59 | ||||||
Commercial Real Estate Construction |
| | ||||||
Commercial Real Estate Other |
32,243 | 194 | ||||||
Total Commercial |
$ | 77,851 | $ | 495 | ||||
(1) | The Company does not record interest on nonaccrual loans until principal is recovered. |
28
Average | Interest | |||||||
Recorded | Income | |||||||
(dollars in thousands) | Investment | Recognized (1) | ||||||
September 30, 2011 |
||||||||
With no related allowance recorded: |
||||||||
Commercial |
$ | 11,833 | $ | 268 | ||||
Commercial Real Estate Construction |
| | ||||||
Commercial Real Estate Other |
10,713 | 169 | ||||||
With an allowance recorded: |
||||||||
Commercial |
17,103 | 145 | ||||||
Commercial Real Estate Construction |
| | ||||||
Commercial Real Estate Other |
26,780 | 328 | ||||||
Total Commercial |
$ | 66,429 | $ | 910 | ||||
(1) | The Company does not record interest on nonaccrual loans until principal is recovered. |
29
Recorded | ||||||||||||||||||||||||
Investment > | ||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days and | Total | |||||||||||||||||||||
(dollars in thousands) | Past Due | Past Due | Accruing | Nonaccrual | Past Due | Current | ||||||||||||||||||
September 30, 2011 |
||||||||||||||||||||||||
Commercial |
$ | 2,459 | $ | 3,336 | $ | 408 | $ | 37,739 | $ | 43,942 | $ | 1,202,347 | ||||||||||||
Commercial Real Estate: |
||||||||||||||||||||||||
Construction |
| 1,434 | | 6,232 | 7,666 | 42,450 | ||||||||||||||||||
Other |
1,185 | 859 | 490 | 66,485 | 69,019 | 1,009,239 | ||||||||||||||||||
Consumer: |
||||||||||||||||||||||||
Heloc |
423 | 166 | 9 | 1,228 | 1,826 | 243,860 | ||||||||||||||||||
Auto |
5,054 | 900 | 153 | 2,149 | 8,256 | 479,727 | ||||||||||||||||||
Other |
1,623 | 381 | 98 | 1,725 | 3,827 | 161,950 | ||||||||||||||||||
Residential |
6,016 | 1,049 | | 9,234 | 16,299 | 849,652 | ||||||||||||||||||
Covered loans |
12,626 | 1,713 | 692 | 199,028 | 214,059 | 497,207 | ||||||||||||||||||
Total loans |
$ | 29,386 | $ | 9,838 | $ | 1,850 | $ | 323,820 | $ | 364,894 | $ | 4,486,432 | ||||||||||||
December 31, 2010 |
||||||||||||||||||||||||
Commercial |
$ | 2,543 | $ | 583 | $ | 79 | $ | 25,488 | $ | 28,693 | $ | 1,182,706 | ||||||||||||
Commercial Real Estate: |
||||||||||||||||||||||||
Construction |
| | | | | 101,016 | ||||||||||||||||||
Other |
992 | 98 | | 30,416 | 31,506 | 809,873 | ||||||||||||||||||
Consumer: |
||||||||||||||||||||||||
Heloc |
849 | 477 | 189 | 1,903 | 3,418 | 244,875 | ||||||||||||||||||
Auto |
5,791 | 1,316 | 120 | 2,331 | 9,558 | 487,544 | ||||||||||||||||||
Other |
1,129 | 972 | 184 | 2,088 | 4,373 | 175,184 | ||||||||||||||||||
Residential |
9,126 | 1,589 | | 8,719 | 19,434 | 645,271 | ||||||||||||||||||
Total |
$ | 20,430 | $ | 5,035 | $ | 572 | $ | 70,945 | $ | 96,982 | $ | 3,646,469 | ||||||||||||
30
September 30, | ||||
(dollars in thousands) | 2011 | |||
Commercial |
$ | 1,946 | ||
Commercial real estate |
24,750 | |||
Consumer |
47,095 | |||
Residential |
398 | |||
Outstanding balance |
$ | 74,189 | ||
Carrying amount, net of allowance of $1,188 |
$ | 73,001 | ||
31
(dollars in thousands) | ||||
Balance at January 1, 2011 |
$ | | ||
New loans purchased |
25,520 | |||
Accretion of income |
(10,006 | ) | ||
Reclassifications from (to) nonaccretable difference |
18,851 | |||
Disposals/other adjustments |
(134 | ) | ||
Balance at September 30, 2011 |
$ | 34,231 | ||
September 30, | ||||
(dollars in thousands) | 2011 | |||
Contractually required payments receivable of loans
purchased during the year: |
||||
Commercial |
$ | 8,131 | ||
Commercial real estate |
50,481 | |||
Consumer |
57,009 | |||
Residential |
907 | |||
$ | 116,528 | |||
Cash flows expected to be collected at acquisition (January 1, 2011 & July
29, 2011) |
$ | 108,567 | ||
Fair value of acquired loans at acquisition (January 1, 2011 & July 29, 2011) |
$ | 95,330 | ||
September 30, | ||||
(dollars in thousands) | 2011 | |||
Commercial |
$ | 154,251 | ||
Commercial real estate |
367,758 | |||
Residential |
50,726 | |||
Consumer |
138,531 | |||
Covered loans |
711,266 | |||
Allowance for loan losses |
(303 | ) | ||
Covered loans, net |
$ | 710,963 | ||
32
(dollars in thousands) | ||||
Balance at January 1, 2011 |
$ | | ||
New loans purchased |
260,665 | |||
Accretion of income |
(7,749 | ) | ||
Reclassifications from (to) nonaccretable difference |
| |||
Disposals/other adjustments |
36 | |||
Balance at September 30, 2011 |
$ | 252,952 | ||
September 30, | December 31, | |||||||
(dollars in thousands) | 2011 | 2010 | ||||||
Other real estate owned |
$ | 9,390 | $ | 5,591 | ||||
Other real estate owned, covered |
31,908 | | ||||||
Total other real estate owned |
$ | 41,298 | $ | 5,591 | ||||
33
Community | ||||||||||||
(dollars in thousands) | Banking | Other | Total | |||||||||
Balance, January 1, 2011 |
$ | 128,011 | $ | 39,873 | $ | 167,884 | ||||||
Goodwill acquired during the period |
97,209 | 892 | 98,101 | |||||||||
Balance, September 30, 2011 |
$ | 225,220 | $ | 40,765 | $ | 265,985 | ||||||
Balance, January 1, 2010 |
$ | 128,011 | $ | 39,873 | $ | 167,884 | ||||||
Goodwill acquired during the period |
| | | |||||||||
Balance, September 30, 2010 |
$ | 128,011 | $ | 39,873 | $ | 167,884 | ||||||
Accumulated | ||||||||||||
Gross Carrying | Amortization | Net Carrying | ||||||||||
(dollars in thousands) | Amount | and Impairment | Amount | |||||||||
September 30, 2011 |
||||||||||||
Amortized intangible assets: |
||||||||||||
Core deposit |
$ | 39,265 | $ | (18,539 | ) | $ | 20,726 | |||||
Customer business relationships |
25,611 | (15,867 | ) | 9,744 | ||||||||
Customer trust relationships |
3,621 | (334 | ) | 3,287 | ||||||||
Customer loan relationships |
4,413 | (1,872 | ) | 2,541 | ||||||||
Total intangible assets |
$ | 72,910 | $ | (36,612 | ) | $ | 36,298 | |||||
December 31, 2010 |
||||||||||||
Amortized intangible assets: |
||||||||||||
Core deposit |
$ | 26,810 | $ | (14,646 | ) | $ | 12,164 | |||||
Customer business relationships |
25,753 | (14,581 | ) | 11,172 | ||||||||
Customer loan relationships |
4,413 | (1,571 | ) | 2,842 | ||||||||
Total intangible assets |
$ | 56,976 | $ | (30,798 | ) | $ | 26,178 | |||||
34
(dollars in thousands) | ||||
2011 remaining |
$ | 2,224 | ||
2012 |
7,995 | |||
2013 |
6,724 | |||
2014 |
5,452 | |||
2015 |
4,372 | |||
Thereafter |
9,531 | |||
Total |
$ | 36,298 | ||
Other | ||||||||||||||||
Federal Funds | Repurchase | Short-term | ||||||||||||||
(dollars in thousands) | Purchased | Agreements | Borrowings | Total | ||||||||||||
2011 |
||||||||||||||||
Outstanding at September 30,
2011 |
$ | 948 | $ | 328,720 | $ | 11,336 | $ | 341,004 | ||||||||
Average amount outstanding |
1,580 | 335,078 | 8,988 | 345,646 | ||||||||||||
Maximum amount outstanding at any month-end |
17,178 | 366,103 | 11,336 | |||||||||||||
Weighted average interest rate: |
||||||||||||||||
During nine months ended
September 30, 2011 |
0.03 | % | 0.15 | % | 0.14 | % | 0.15 | % | ||||||||
At September 30, 2011 |
| 0.15 | | 0.15 |
35
September 30, | December 31, | |||||||
(dollars in thousands) | 2011 | 2010 | ||||||
Old National Bancorp: |
||||||||
Junior subordinated debenture (variable rates of
2.12%
to 3.42% and fixed rates of 6.52% to 7.15%)
maturing
July 2033 to June 2037 |
$ | 16,000 | $ | 8,000 | ||||
Subordinated notes (fixed rate of 10.00%)
maturing June 2019 |
13,000 | | ||||||
ASC 815 fair value hedge and other basis adjustments |
(2,844 | ) | (36 | ) | ||||
Old National Bank: |
||||||||
Securities sold under agreements to repurchase
(variable
rate 3.05%) maturing October 2014 |
50,000 | 50,000 | ||||||
Federal Home Loan Bank advances (fixed rates
1.24% to 8.34% and variable rate 2.53%)
maturing June 2012 to January 2023 |
211,006 | 211,696 | ||||||
Subordinated bank notes (fixed rates of 6.75%)
maturing October 2011 |
150,000 | 150,000 | ||||||
Capital lease obligation |
4,273 | 4,307 | ||||||
ASC 815 fair value hedge and other basis adjustments |
2,449 | (2,056 | ) | |||||
Total other borrowings |
$ | 443,884 | $ | 421,911 | ||||
(dollars in thousands) | ||||
Due in 2011 |
$ | 150,012 | ||
Due in 2012 |
688 | |||
Due in 2013 |
75,649 | |||
Due in 2014 |
92,560 | |||
Due in 2015 |
16,763 | |||
Thereafter |
108,607 | |||
SFAS 133 fair value hedge and other basis adjustments |
(395 | ) | ||
Total |
$ | 443,884 | ||
36
37
(dollars in thousands) | ||||
2011 remaining |
$ | 97 | ||
2012 |
390 | |||
2013 |
390 | |||
2014 |
410 | |||
2015 |
410 | |||
Thereafter |
10,494 | |||
Total minimum lease payments |
12,191 | |||
Less amounts representing interest |
7,918 | |||
Present value of net minimum lease payments |
$ | 4,273 | ||
38
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest cost |
$ | 525 | $ | 498 | $ | 1,575 | $ | 1,492 | ||||||||
Expected return on plan
assets |
(676 | ) | (490 | ) | (2,028 | ) | (1,470 | ) | ||||||||
Recognized actuarial loss |
689 | 401 | 2,067 | 1,203 | ||||||||||||
Settlement |
465 | 350 | 1,069 | 350 | ||||||||||||
Net periodic benefit cost |
$ | 1,003 | $ | 759 | $ | 2,683 | $ | 1,575 | ||||||||
39
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Provision at statutory rate of 35% |
$ | 8,695 | $ | 4,776 | $ | 24,058 | $ | 13,185 | ||||||||
Tax-exempt income |
(2,421 | ) | (2,416 | ) | (7,182 | ) | (7,749 | ) | ||||||||
Reversal of portion of unrecognized tax
benefits |
(623 | ) | (652 | ) | (623 | ) | (652 | ) | ||||||||
State income taxes |
1,196 | 228 | 2,292 | 475 | ||||||||||||
Interim period effective rate adjustment |
888 | | 89 | | ||||||||||||
Other, net |
310 | (187 | ) | (144 | ) | (77 | ) | |||||||||
Income tax expense |
$ | 8,045 | $ | 1,749 | $ | 18,490 | $ | 5,182 | ||||||||
Effective tax rate |
32.4 | % | 12.8 | % | 26.9 | % | 13.8 | % | ||||||||
(dollars in thousands) | 2011 | 2010 | ||||||
Balance at January 1 |
$ | 4,553 | $ | 8,500 | ||||
Additions (reductions) based on tax positions
related to the current year |
4 | (3,348 | ) | |||||
Reductions due to statute of limitations expiring |
(413 | ) | (601 | ) | ||||
Balance at September 30 |
$ | 4,144 | $ | 4,551 | ||||
40
41
Asset Derivatives | ||||||||||||
September 30, 2011 | December 31, 2010 | |||||||||||
Balance | Balance | |||||||||||
Sheet | Fair | Sheet | Fair | |||||||||
(dollars in thousands) | Location | Value | Location | Value | ||||||||
Derivatives designated as hedging instruments |
||||||||||||
Interest rate contracts |
Other assets | $ | 8,096 | Other assets | $ | 4,766 | ||||||
Total derivatives designated as hedging instruments |
$ | 8,096 | $ | 4,766 | ||||||||
Derivatives not designated as hedging instruments |
||||||||||||
Interest rate contracts |
Other assets | $ | 38,927 | Other assets | $ | 28,269 | ||||||
Commodity contracts |
Other assets | | Other assets | 132 | ||||||||
Mortgage contracts |
Other assets | 186 | Other assets | 254 | ||||||||
Total derivatives not designated as hedging
instruments |
$ | 39,113 | $ | 28,655 | ||||||||
Total derivative assets |
$ | 47,209 | $ | 33,421 | ||||||||
Liability Derivatives | ||||||||||||
September 30, 2011 | December 31, 2010 | |||||||||||
Balance | Balance | |||||||||||
Sheet | Fair | Sheet | Fair | |||||||||
(dollars in thousands) | Location | Value | Location | Value | ||||||||
Derivatives not designated as hedging instruments |
||||||||||||
Interest rate contracts |
Other liabilities | $ | 39,599 | Other liabilities | $ | 28,928 | ||||||
Commodity contracts |
Other liabilities | | Other liabilities | 132 | ||||||||
Total derivatives not designated as hedging instruments |
$ | 39,599 | $ | 29,060 | ||||||||
Total derivative liabilities |
$ | 39,599 | $ | 29,060 | ||||||||
42
Three months | Three months | |||||||||
ended | ended | |||||||||
(dollars in thousands) | September 30, 2011 | September 30, 2010 | ||||||||
Derivatives in | Location of Gain or (Loss) | Amount of Gain or (Loss) | ||||||||
Fair Value Hedging | Recognized in Income on | Recognized in Income on | ||||||||
Relationships | Derivative | Derivative | ||||||||
Interest rate contracts (1) |
Interest income / (expense) | $ | 744 | $ | 843 | |||||
Interest rate contracts (2) |
Other income / (expense) | 345 | 238 | |||||||
Total |
$ | 1,089 | $ | 1,081 | ||||||
Derivatives in | Location of Gain or (Loss) | Amount of Gain or (Loss) | ||||||||
Cash Flow Hedging | Recognized in Income on | Recognized in Income on | ||||||||
Relationships | Derivative | Derivative | ||||||||
Interest rate contracts (1) |
Interest income / (expense) | $ | 410 | $ | 383 | |||||
Total |
$ | 410 | $ | 383 | ||||||
Location of Gain or (Loss) | Amount of Gain or (Loss) | |||||||||
Derivatives Not Designated as | Recognized in Income on | Recognized in Income on | ||||||||
Hedging Instruments | Derivative | Derivative | ||||||||
Interest rate contracts (3) |
Other income / (expense) | $ | (196 | ) | $ | 132 | ||||
Mortgage contracts |
Mortgage banking revenue | (47 | ) | 131 | ||||||
Total |
$ | (243 | ) | $ | 263 | |||||
Nine months | Nine months | |||||||||
ended | ended | |||||||||
(dollars in thousands) | September 30, 2011 | September 30, 2010 | ||||||||
Derivatives in | Location of Gain or (Loss) | Amount of Gain or (Loss) | ||||||||
Fair Value Hedging | Recognized in Income on | Recognized in Income on | ||||||||
Relationships | Derivative | Derivative | ||||||||
Interest rate contracts (1) |
Interest income / (expense) | $ | 2,205 | $ | 2,750 | |||||
Interest rate contracts (2) |
Other income / (expense) | 714 | 1,555 | |||||||
Total |
$ | 2,919 | $ | 4,305 | ||||||
Derivatives in | Location of Gain or (Loss) | Amount of Gain or (Loss) | ||||||||
Cash Flow Hedging | Recognized in Income on | Recognized in Income on | ||||||||
Relationships | Derivative | Derivative | ||||||||
Interest rate contracts (1) |
Interest income / (expense) | $ | 1,197 | $ | 1,158 | |||||
Total |
$ | 1,197 | $ | 1,158 | ||||||
Location of Gain or (Loss) | Amount of Gain or (Loss) | |||||||||
Derivatives Not Designated as | Recognized in Income on | Recognized in Income on | ||||||||
Hedging Instruments | Derivative | Derivative | ||||||||
Interest rate contracts (3) |
Other income / (expense) | $ | (12 | ) | $ | (169 | ) | |||
Mortgage contracts |
Mortgage banking revenue | (68 | ) | (93 | ) | |||||
Total |
$ | (80 | ) | $ | (262 | ) | ||||
(1) | Amounts represent the net interest payments as stated in the contractual agreements. | |
(2) | Amounts represent ineffectiveness on derivatives designated as fair value hedges. | |
(3) | Includes the valuation differences between the customer and offsetting counterparty swaps. |
43
44
45
46
Community | ||||||||||||||||
(dollars in thousands) | Banking | Treasury | Other | Total | ||||||||||||
Three months ended September 30, 2011 |
||||||||||||||||
Net interest income |
$ | 75,292 | $ | (11,803 | ) | $ | 9,103 | $ | 72,592 | |||||||
Provision for loan losses |
(1,258 | ) | | 1,176 | (82 | ) | ||||||||||
Noninterest income |
28,800 | 4,756 | 13,770 | 47,326 | ||||||||||||
Noninterest expense |
60,828 | 8,840 | 25,490 | 95,158 | ||||||||||||
Income (loss) before income taxes |
44,522 | (15,887 | ) | (3,793 | ) | 24,842 | ||||||||||
Total assets |
5,156,030 | 3,569,790 | 206,880 | 8,932,700 | ||||||||||||
Three months ended September 30, 2010 |
||||||||||||||||
Net interest income |
$ | 63,402 | $ | (8,305 | ) | $ | (929 | ) | $ | 54,168 | ||||||
Provision for loan losses |
6,400 | | | 6,400 | ||||||||||||
Noninterest income |
22,119 | 4,506 | 15,354 | 41,979 | ||||||||||||
Noninterest expense |
57,298 | 3,358 | 15,446 | 76,102 | ||||||||||||
Income (loss) before income taxes |
21,823 | (7,157 | ) | (1,021 | ) | 13,645 | ||||||||||
Total assets |
3,828,941 | 3,567,870 | 109,303 | 7,506,114 | ||||||||||||
Nine months ended September 30, 2011 |
||||||||||||||||
Net interest income |
$ | 218,356 | $ | (30,009 | ) | $ | 7,931 | $ | 196,278 | |||||||
Provision for loan losses |
5,261 | | 1,176 | 6,437 | ||||||||||||
Noninterest income |
80,989 | 8,816 | 43,931 | 133,736 | ||||||||||||
Noninterest expense |
192,071 | 10,617 | 52,153 | 254,841 | ||||||||||||
Income (loss) before income taxes |
102,013 | (31,810 | ) | (1,467 | ) | 68,736 | ||||||||||
Total assets |
5,156,030 | 3,569,790 | 206,880 | 8,932,700 | ||||||||||||
Nine months ended September 30, 2010 |
||||||||||||||||
Net interest income |
$ | 187,215 | $ | (19,984 | ) | $ | (2,792 | ) | $ | 164,439 | ||||||
Provision for loan losses |
23,706 | | (25 | ) | 23,681 | |||||||||||
Noninterest income |
66,345 | 13,139 | 48,461 | 127,945 | ||||||||||||
Noninterest expense |
176,081 | 7,603 | 47,349 | 231,033 | ||||||||||||
Income (loss) before income taxes |
53,773 | (14,448 | ) | (1,655 | ) | 37,670 | ||||||||||
Total assets |
3,828,941 | 3,567,870 | 109,303 | 7,506,114 | ||||||||||||
| Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. |
47
| Level 2 Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
| Level 3 Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
Trading securities: The fair value for trading securities is determined by quoted market prices (Level 1). |
Investment securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using swap and libor curves plus spreads that adjust for loss severities, volatility, credit risk and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations. |
Residential loans held for sale: The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). |
Derivative financial instruments: The fair values of derivative financial instruments are based on derivative valuation models using market data inputs as of the valuation date (Level 2). |
Fair Value Measurements at September 30, 2011 Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Financial Assets |
||||||||||||||||
Trading securities |
$ | 2,794 | $ | 2,794 | $ | | $ | | ||||||||
Investment securities available-for-sale: |
||||||||||||||||
U.S. Treasury |
65,951 | 65,951 | | | ||||||||||||
U.S. Government-sponsored entities and agencies |
180,934 | | 180,934 | | ||||||||||||
Mortgage-backed securities Agency |
1,346,534 | | 1,346,534 | | ||||||||||||
Mortgage-backed securities Non-agency |
95,051 | | 95,051 | | ||||||||||||
States and political subdivisions |
391,202 | | 391,202 | | ||||||||||||
Pooled trust preferred securities |
7,530 | | | 7,530 | ||||||||||||
Other securities |
165,887 | | 165,887 | | ||||||||||||
Residential loans held for sale |
4,710 | | 4,710 | | ||||||||||||
Derivative assets |
47,209 | | 47,209 | | ||||||||||||
Financial Liabilities |
||||||||||||||||
Derivative liabilities |
39,599 | | 39,599 | |
48
Fair Value Measurements at December 31, 2010 Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Financial Assets |
||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||
U.S. Treasury |
$ | 62,550 | $ | 62,550 | $ | | $ | | ||||||||
U.S. Government-sponsored entities and agencies |
315,133 | | 315,133 | | ||||||||||||
Mortgage-backed securities Agency |
944,446 | | 944,446 | | ||||||||||||
Mortgage-backed securities Non-agency |
126,806 | | 126,806 | | ||||||||||||
States and political subdivisions |
348,924 | | 348,924 | | ||||||||||||
Pooled trust preferred securities |
8,400 | | | 8,400 | ||||||||||||
Other securities |
153,963 | | 153,963 | | ||||||||||||
Residential loans held for sale |
3,819 | | 3,819 | | ||||||||||||
Derivative assets |
34,082 | | 34,082 | | ||||||||||||
Financial Liabilities |
||||||||||||||||
Derivative liabilities |
29,721 | | 29,721 | |
Fair Value Measurements | ||||
using Significant | ||||
Unobservable Inputs | ||||
(Level 3) | ||||
Pooled Trust Preferred | ||||
Securities Available- | ||||
(dollars in thousands) | for-Sale | |||
Beginning balance, January 1, 2011 |
$ | 8,400 | ||
Accretion/(amortization) of discount or premium |
(49 | ) | ||
Payments received |
(5 | ) | ||
Credit loss write-downs |
| |||
Increase/(decrease) in fair value of securities |
(816 | ) | ||
Ending balance, September 30, 2011 |
$ | 7,530 | ||
49
Fair Value Measurements | ||||
using Significant | ||||
Unobservable Inputs | ||||
(Level 3) | ||||
Pooled Trust Preferred | ||||
Securities Available- | ||||
(dollars in thousands) | for-Sale | |||
Beginning balance, January 1, 2010 |
$ | 12,398 | ||
Accretion/(amortization) of discount or premium |
(86 | ) | ||
Payments received |
(10 | ) | ||
Credit loss write-downs |
(311 | ) | ||
Increase/(decrease) in fair value of securities |
(3,575 | ) | ||
Ending balance, September 30, 2010 |
$ | 8,416 | ||
Fair Value Measurements at September 30, 2011 Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Collateral Dependent Impaired Loans |
||||||||||||||||
Commercial loans |
$ | 17,165 | | | $ | 17,165 | ||||||||||
Commercial real estate loans |
21,986 | | | 21,986 |
Fair Value Measurements at December 31, 2010 Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Collateral Dependent Impaired Loans |
||||||||||||||||
Commercial loans |
$ | 14,721 | | | $ | 14,721 | ||||||||||
Commercial real estate loans |
8,112 | | | 8,112 |
50
Aggregate | Contractual | |||||||||||
(dollars in thousands) | Fair Value | Difference | Principal | |||||||||
Residential loans held for sale |
$ | 4,710 | $ | 158 | $ | 4,552 |
Changes in Fair Value for the Three Months ended September 30, 2011, for Items | ||||||||||||||||
Measured at Fair Value Pursuant to Election of the Fair Value Option | ||||||||||||||||
Total Changes | ||||||||||||||||
in Fair Values | ||||||||||||||||
Other | Included in | |||||||||||||||
Gains and | Interest | Interest | Current Period | |||||||||||||
(dollars in thousands) | (Losses) | Income | (Expense) | Earnings | ||||||||||||
Residential loans held for sale |
$ | (7 | ) | $ | | $ | | $ | (7 | ) |
Changes in Fair Value for the Nine Months ended September 30, 2011, for Items | ||||||||||||||||
Measured at Fair Value Pursuant to Election of the Fair Value Option | ||||||||||||||||
Total Changes | ||||||||||||||||
in Fair Values | ||||||||||||||||
Other | Included in | |||||||||||||||
Gains and | Interest | Interest | Current Period | |||||||||||||
(dollars in thousands) | (Losses) | Income | (Expense) | Earnings | ||||||||||||
Residential loans held for sale |
$ | 179 | $ | | $ | (1 | ) | $ | 178 |
51
Aggregate | Contractual | |||||||||||
(dollars in thousands) | Fair Value | Difference | Principal | |||||||||
Residential loans held for sale |
$ | 3,512 | $ | 81 | $ | 3,431 |
Changes in Fair Value for the Three Months ended September 30, 2010, for Items | ||||||||||||||||
Measured at Fair Value Pursuant to Election of the Fair Value Option | ||||||||||||||||
Total Changes | ||||||||||||||||
in Fair Values | ||||||||||||||||
Other | Included in | |||||||||||||||
Gains and | Interest | Interest | Current Period | |||||||||||||
(dollars in thousands) | (Losses) | Income | (Expense) | Earnings | ||||||||||||
Residential loans held for sale |
$ | (136 | ) | $ | 2 | $ | | $ | (134 | ) |
Changes in Fair Value for the Nine Months ended September 30, 2010, for Items | ||||||||||||||||
Measured at Fair Value Pursuant to Election of the Fair Value Option | ||||||||||||||||
Total Changes | ||||||||||||||||
in Fair Values | ||||||||||||||||
Other | Included in | |||||||||||||||
Gains and | Interest | Interest | Current Period | |||||||||||||
(dollars in thousands) | (Losses) | Income | (Expense) | Earnings | ||||||||||||
Residential loans held for sale |
$ | (206 | ) | $ | 3 | $ | | $ | (203 | ) |
52
Carrying | Fair | |||||||
(dollars in thousands) | Value | Value | ||||||
September 30, 2011 |
||||||||
Financial Assets |
||||||||
Cash, due from banks, federal funds sold
and money market investments |
$ | 269,229 | $ | 269,229 | ||||
Investment securities held-to-maturity: |
||||||||
U.S. Government-sponsored entities
and agencies |
177,963 | 189,617 | ||||||
Mortgage-backed securities Agency |
91,622 | 95,372 | ||||||
State and political subdivisions |
216,643 | 225,384 | ||||||
Other securities |
7,054 | 7,054 | ||||||
Federal Home Loan Bank stock |
34,870 | 34,870 | ||||||
Loans, net (including covered loans): |
||||||||
Commercial |
1,376,700 | 1,425,792 | ||||||
Commercial real estate |
1,465,571 | 1,531,385 | ||||||
Residential real estate |
913,500 | 990,779 | ||||||
Consumer credit |
1,030,033 | 1,082,806 | ||||||
FDIC indemnification asset |
168,091 | 168,091 | ||||||
Accrued interest receivable |
43,713 | 43,713 | ||||||
Financial Liabilities |
||||||||
Deposits: |
||||||||
Noninterest-bearing demand deposits |
$ | 1,728,548 | $ | 1,728,548 | ||||
NOW, savings and money market deposits |
3,447,992 | 3,447,992 | ||||||
Time deposits |
1,690,723 | 1,734,907 | ||||||
Short-term borrowings: |
||||||||
Federal funds purchased |
948 | 948 | ||||||
Repurchase agreements |
328,720 | 328,716 | ||||||
Other short-term borrowings |
11,336 | 11,336 | ||||||
Other borrowings: |
||||||||
Junior subordinated debenture |
16,000 | 12,788 | ||||||
Subordinated notes |
13,000 | 12,999 | ||||||
Repurchase agreements |
50,000 | 54,848 | ||||||
Federal Home Loan Bank advances |
211,006 | 227,938 | ||||||
Subordinated bank notes |
150,000 | 150,000 | ||||||
Capital lease obligation |
4,273 | 5,094 | ||||||
Accrued interest payable |
10,366 | 10,366 | ||||||
FDIC true-up liability |
14,090 | 14,090 | ||||||
Standby letters of credit |
508 | 508 | ||||||
Off-Balance Sheet Financial Instruments |
||||||||
Commitments to extend credit |
$ | | $ | 1,422 |
53
Carrying | Fair | |||||||
(dollars in thousands) | Value | Value | ||||||
December 31, 2010 |
||||||||
Financial Assets |
||||||||
Cash, due from banks, federal funds sold
and money market investments |
$ | 251,552 | $ | 251,552 | ||||
Investment securities held-to-maturity: |
||||||||
U.S. Government-sponsored entities and
agencies |
303,265 | 301,809 | ||||||
Mortgage-backed securities Agency |
117,013 | 119,080 | ||||||
State and political subdivisions |
217,381 | 204,379 | ||||||
Other securities |
551 | 375 | ||||||
Federal Home Loan Bank stock |
31,937 | 31,937 | ||||||
Loans, net (including impaired loans): |
||||||||
Commercial |
1,185,194 | 1,220,464 | ||||||
Commercial real estate |
909,742 | 952,885 | ||||||
Residential real estate |
662,396 | 710,865 | ||||||
Consumer credit |
913,810 | 969,263 | ||||||
Accrued interest receivable |
42,971 | 42,971 | ||||||
Financial Liabilities |
||||||||
Deposits: |
||||||||
Noninterest-bearing demand deposits |
$ | 1,276,024 | $ | 1,276,024 | ||||
NOW, savings and money market deposits |
2,711,644 | 2,711,644 | ||||||
Time deposits |
1,475,257 | 1,520,093 | ||||||
Short-term borrowings: |
||||||||
Federal funds purchased |
1,663 | 1,663 | ||||||
Repurchase agreements |
287,414 | 287,416 | ||||||
Other short-term borrowings |
9,155 | 9,155 | ||||||
Other borrowings: |
||||||||
Junior subordinated debenture |
8,000 | 7,998 | ||||||
Repurchase agreements |
50,000 | 54,104 | ||||||
Federal Home Loan Bank advances |
211,696 | 220,531 | ||||||
Subordinated bank notes |
150,000 | 154,420 | ||||||
Capital lease obligation |
4,307 | 5,138 | ||||||
Accrued interest payable |
7,860 | 7,860 | ||||||
Standby letters of credit |
518 | 518 | ||||||
Off-Balance Sheet Financial Instruments |
||||||||
Commitments to extend credit |
$ | | $ | 1,311 |
54
55
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
56
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | % | September 30, | % | |||||||||||||||||||||
(dollars in thousands) | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Income Statement Summary: |
||||||||||||||||||||||||
Net interest income |
$ | 72,592 | $ | 54,168 | 34.0 | % | $ | 196,278 | $ | 164,439 | 19.4 | % | ||||||||||||
Provision for loan losses |
(82 | ) | 6,400 | (101.3 | ) | 6,437 | 23,681 | (72.8 | ) | |||||||||||||||
Noninterest income |
47,326 | 41,979 | 12.7 | 133,736 | 127,945 | 4.5 | ||||||||||||||||||
Noninterest expense |
95,158 | 76,102 | 25.0 | 254,841 | 231,033 | 10.3 | ||||||||||||||||||
Other Data: |
||||||||||||||||||||||||
Return on average common
equity |
6.61 | % | 5.40 | % | 6.75 | % | 5.02 | % | ||||||||||||||||
Efficiency ratio (1) |
77.56 | 77.66 | 74.47 | 77.21 | ||||||||||||||||||||
Tier 1 leverage ratio |
7.88 | 10.24 | 7.88 | 10.24 | ||||||||||||||||||||
Net charge-offs to
average loans |
0.50 | 0.66 | 0.44 | 0.76 |
(1) | Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of fully taxable equivalent net interest income and noninterest income, excluding net gains from securities transactions. This presentation excludes intangible amortization and net securities gains, as is common in other company disclosures, and better aligns with true operating performance. |
57
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net interest income |
$ | 72,592 | $ | 54,168 | $ | 196,278 | $ | 164,439 | ||||||||
Taxable equivalent adjustment |
2,914 | 3,154 | 8,842 | 10,335 | ||||||||||||
Net interest income taxable equivalent |
$ | 75,506 | $ | 57,322 | $ | 205,120 | $ | 174,774 | ||||||||
Average earning assets |
$ | 7,626,682 | $ | 6,700,212 | $ | 7,287,482 | $ | 6,886,583 | ||||||||
Net interest margin |
3.81 | % | 3.23 | % | 3.59 | % | 3.18 | % | ||||||||
Net interest margin fully taxable
equivalent |
3.96 | % | 3.42 | % | 3.75 | % | 3.38 | % |
58
59
60
61
62
63
September 30, | ||||
(dollars in thousands) | 2011 | |||
Loans, net of discount & allowance |
$ | 710,963 | ||
Other real estate owned |
31,908 | |||
Total covered assets |
$ | 742,871 | ||
64
65
Regulatory | ||||||||||||||||
Guidelines | September 30, | December 31, | ||||||||||||||
Minimum | 2011 | 2010 | 2010 | |||||||||||||
Risk-based capital: |
||||||||||||||||
Tier 1 capital to total avg assets
(leverage ratio) |
4.00 | % | 7.88 | % | 10.24 | % | 9.01 | % | ||||||||
Tier 1 capital to risk-adjusted total assets |
4.00 | 12.17 | 15.37 | 13.57 | ||||||||||||
Total capital to risk-adjusted total assets |
8.00 | 13.67 | 17.25 | 14.83 | ||||||||||||
Shareholders equity to assets |
N/A | 11.50 | 11.93 | 12.10 |
66
67
68
September 30, | December 31, | |||||||||||
(dollars in thousands) | 2011 | 2010 | 2010 | |||||||||
Nonaccrual loans |
||||||||||||
Commercial |
$ | 37,739 | $ | 25,519 | $ | 25,488 | ||||||
Commercial real estate |
72,717 | 28,547 | 30,416 | |||||||||
Residential real estate |
9,234 | 9,009 | 8,719 | |||||||||
Consumer |
5,102 | 6,768 | 6,322 | |||||||||
Total nonaccrual loans |
124,792 | 69,843 | 70,945 | |||||||||
Renegotiated loans not on nonaccrual |
| | | |||||||||
Past due loans (90 days or more and still accruing) |
||||||||||||
Commercial |
408 | 304 | 79 | |||||||||
Commercial real estate |
490 | | | |||||||||
Consumer |
260 | 1,060 | 493 | |||||||||
Total past due loans |
1,158 | 1,364 | 572 | |||||||||
Other real estate owned |
9,390 | 5,886 | 5,591 | |||||||||
Total under-performing assets, excluding covered assets |
$ | 135,340 | $ | 77,093 | $ | 77,108 | ||||||
Classified loans (includes nonaccrual,
renegotiated, past due 90 days and other problem loans) |
$ | 226,352 | $ | 170,870 | $ | 174,341 | ||||||
Other classified assets (3) |
113,161 | 148,011 | 105,572 | |||||||||
Criticized loans |
98,516 | 74,991 | 84,017 | |||||||||
Total criticized and classified assets, excluding
covered assets |
$ | 438,029 | $ | 393,872 | $ | 363,930 | ||||||
Asset Quality Ratios: |
||||||||||||
Non-performing loans/total loans (1) (2) |
3.01 | % | 1.89 | % | 1.90 | % | ||||||
Under-performing assets/total loans and
other real estate owned (1) |
3.26 | 2.08 | 2.06 | |||||||||
Under-performing assets/total assets |
1.52 | 1.03 | 1.06 | |||||||||
Allowance for loan losses/under-performing assets |
48.19 | 93.59 | 93.78 |
(1) | Loans exclude residential loans held for sale and leases held for sale. | |
(2) | Non-performing loans include nonaccrual and renegotiated loans. | |
(3) | Includes 9 pooled trust preferred securities, 9 non-agency mortgage-backed securities and 1 corporate security at September 30, 2011. |
69
(dollars in thousands) | ||||
30-59 days past due |
$ | 12,626 | ||
60-89 days past due |
1,713 | |||
90 days past due still accruing |
692 | |||
Nonaccrual |
199,028 | |||
Current |
497,207 | |||
Total covered loans |
$ | 711,266 | ||
Other real estate owned |
$ | 31,908 |
70
| adjusting balance sheet mix or altering interest rate characteristics of assets and liabilities; | ||
| changing product pricing strategies; | ||
| modifying characteristics of the investment securities portfolio; or | ||
| using derivative financial instruments, to a limited degree. |
71
Changes in Net Interest Income | ||||||||||||||||||||||||||||||||
Immediate | One Year Horizon | Two Year Cumulative Horizon | ||||||||||||||||||||||||||||||
Change in the | 9/30/2011 | 9/30/2010 | 9/30/2011 | 9/30/2010 | ||||||||||||||||||||||||||||
Level of Interest | $ Change | $ Change | $ Change | $ Change | ||||||||||||||||||||||||||||
Rates | (000s) | % Change | (000s) | % Change | (000s) | % Change | (000s) | % Change | ||||||||||||||||||||||||
+ 3.00% |
(12,791 | ) | -4.89 | % | (3,030 | ) | -1.38 | % | (9,757 | ) | -1.89 | % | 10,574 | 2.38 | % | |||||||||||||||||
+ 2.00% |
(5,723 | ) | -2.19 | % | (2,156 | ) | -0.98 | % | 2,718 | 0.53 | % | 7,219 | 1.63 | % | ||||||||||||||||||
+ 1.00% |
842 | 0.32 | % | (679 | ) | -0.31 | % | 9,512 | 1.84 | % | 5,473 | 1.23 | % | |||||||||||||||||||
- 1.00% |
NA | NA | NA | NA | NA | NA | NA | NA |
Economic Value of Equity | ||||||||||||||||
Immediate Change in | 9/30/2011 | 9/30/2010 | ||||||||||||||
the Level of Interest | $ Change | $ Change | ||||||||||||||
Rates | (millions) | % Change | (millions) | % Change | ||||||||||||
+ 3.00% |
6 | 0.86 | % | (76 | ) | -11.60 | % | |||||||||
+ 2.00% |
20 | 2.90 | % | (57 | ) | -8.70 | % | |||||||||
+ 1.00% |
50 | 7.42 | % | (12 | ) | -1.82 | % | |||||||||
- 1.00% |
NA | NA | NA | NA |
72
| Fitch Rating Service kept their long-term outlook rating as stable (unchanged) during the latest rating review on March 15, 2011 | ||
| Dominion Bond Rating Services has issued a stable outlook as of August 2, 2011 | ||
| Moodys Investor Service did not rate Old National Bancorp as of December 20, 2010. | ||
| Moodys Investor Service downgraded Old National Banks Long Term Rating from A1 to A2 and changed its outlook from Negative to Stable on November 1, 2011. Old National Banks Short Term Rating was unchanged. |
73
Moodys Investor Service | Fitch, Inc. | Dominion Bond Rating Svc. | ||||||||||
Long | Short | Long | Short | Long | Short | |||||||
term | term | term | term | term | term | |||||||
Old National Bancorp
|
N/A | N/A | BBB | F2 | BBB (high) | R-2 (high) | ||||||
Old National Bank
|
A2 | P-1 | BBB+ | F2 | A (low) | R-1 (low) |
74
Payments Due In | ||||||||||||||||||||
One Year | One to | Three to | Over | |||||||||||||||||
(dollars in thousands) | or Less (1) | Three Years | Five Years | Five Years | Total | |||||||||||||||
Deposits without stated maturity |
$ | 5,176,540 | $ | | $ | | $ | | $ | 5,176,540 | ||||||||||
IRAs, consumer and brokered certificates of deposit |
268,450 | 1,120,138 | 183,754 | 118,381 | 1,690,723 | |||||||||||||||
Short-term borrowings |
341,004 | | | | 341,004 | |||||||||||||||
Other borrowings |
150,012 | 76,337 | 109,323 | 108,212 | 443,884 | |||||||||||||||
Fixed interest payments (2) |
3,147 | 20,385 | 13,886 | 43,576 | 80,994 | |||||||||||||||
Operating leases |
8,632 | 63,823 | 58,733 | 296,045 | 427,233 | |||||||||||||||
Other long-term liabilities (3) |
250 | | | | 250 |
(1) | For the remaining three months of fiscal 2011. | |
(2) | Our subordinated bank notes, certain trust preferred securities and certain Federal Home Loan Bank advances have fixed rates ranging from 1.24% to 10.00%. All of our other long-term debt is at Libor based variable rates at September 30, 2011. The projected variable interest assumes no increase in Libor rates from September 30, 2011. | |
(3) | Amount expected to be contributed to the pension plans in 2011. Amounts for 2012 and beyond are unknown at this time. |
75
| Description. For acquisitions, we are required to record the assets acquired, including identified intangible assets, and the liabilities assumed at their fair value. These often involve estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques that may include estimates of attrition, inflation, asset growth rates or other relevant factors. In addition, the determination of the useful lives over which an intangible asset will be amortized is subjective. Under FASB ASC 350 (SFAS No. 142 Goodwill and Other Intangible Assets), goodwill and indefinite-lived assets recorded must be reviewed for impairment on an annual basis, as well as on an interim basis if events or changes indicate that the asset might be impaired. An impairment loss must be recognized for any excess of carrying value over fair value of the goodwill or the indefinite-lived intangible asset. |
| Judgments and Uncertainties. The determination of fair values is based on internal valuations using managements assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. |
| Effect if Actual Results Differ From Assumptions. Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying values of goodwill or intangible assets and could result in impairment losses affecting the financials of the Company as a whole and the individual lines of business in which the goodwill or intangibles reside. |
| Description. Loans acquired with evidence of credit deterioration since inception and for which it is probable that all contractual payments will not be received are accounted for under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30). These loans are recorded at fair value at the time of acquisition, with no carryover of the related allowance for loan losses. Fair value of acquired loans is determined using a discounted cash flow methodology based on assumptions about the amount and timing of principal and interest payments, principal prepayments and principal defaults and losses, and current market rates. In recording the acquisition date fair values of acquired impaired loans, management calculates a non-accretable difference (the credit component of the purchased loans) and an accretable difference (the yield component of the purchased loans). |
| Judgments and Uncertainties. These cash flow evaluations are inherently subjective as they require management to make estimates about expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. |
| Effect if Actual Results Differ From Assumptions. Changes in these factors, as well as changing economic conditions will likely impact the carrying value of these acquired loans as well as the carrying value of any associated indemnification assets, as the FDIC will reimburse the Company for losses incurred on certain acquired loans, but the shared-loss agreements may not fully offset the financial effects of such a situation. |
76
| Description. The allowance for loan losses is maintained at a level believed adequate by management to absorb probable incurred losses in the consolidated loan portfolio. Managements evaluation of the adequacy of the allowance is an estimate based on reviews of individual loans, pools of homogeneous loans, assessments of the impact of current and anticipated economic conditions on the portfolio and historical loss experience. The allowance represents managements best estimate, but significant downturns in circumstances relating to loan quality and economic conditions could result in a requirement for additional allowance. Likewise, an upturn in loan quality and improved economic conditions may allow a reduction in the required allowance. In either instance, unanticipated changes could have a significant impact on results of operations. |
| Judgments and Uncertainties. We use migration analysis as a tool to determine the adequacy of the allowance for loan losses for performing commercial loans. Migration analysis is a statistical technique that attempts to estimate probable losses for existing pools of loans by matching actual losses incurred on loans back to their origination. Judgment is used to select and weight the historical periods which are most representative of the current environment. |
| Effect if Actual Results Differ From Assumptions. The allowance represents managements best estimate, but significant downturns in circumstances relating to loan quality and economic conditions could result in a requirement for additional allowance. Likewise, an upturn in loan quality and improved economic conditions may allow a reduction in the required allowance. In either instance, unanticipated changes could have a significant impact on results of operations. |
77
| Description. As part of our overall interest rate risk management, we use derivative instruments to reduce exposure to changes in interest rates and market prices for financial instruments. The application of the hedge accounting policy requires judgment in the assessment of hedge effectiveness, identification of similar hedged item groupings and measurement of changes in the fair value of derivative financial instruments and hedged items. To the extent hedging relationships are found to be effective, as determined by FASB ASC 815 (SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities), changes in fair value of the derivatives are offset by changes in the fair value of the related hedged item or recorded to other comprehensive income. Management believes hedge effectiveness is evaluated properly in preparation of the financial statements. All of the derivative financial instruments we use have an active market and indications of fair value can be readily obtained. We are not using the short-cut method of accounting for any fair value derivatives. |
| Judgments and Uncertainties. The application of the hedge accounting policy requires judgment in the assessment of hedge effectiveness, identification of similar hedged item groupings and measurement of changes in the fair value of derivative financial instruments and hedged items. |
| Effect if Actual Results Differ From Assumptions. To the extent hedging relationships are found to be effective, as determined by FASB ASC 815 (SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities), changes in fair value of the derivatives are offset by changes in the fair value of the related hedged item or recorded to other comprehensive income. However, if in the future the derivative financial instruments used by us no longer qualify for hedge accounting treatment, all changes in fair value of the derivative would flow through the consolidated statements of income in other noninterest income, resulting in greater volatility in our earnings. |
| Description. We are subject to the income tax laws of the U.S., its states and the municipalities in which we operate. These tax laws are complex and subject to different interpretations by the taxpayer and the relevant government taxing authorities. We review income tax expense and the carrying value of deferred tax assets quarterly; and as new information becomes available, the balances are adjusted as appropriate. FASB ASC 740-10 (FIN 48) prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. See Note 16 to the Consolidated Financial Statements for a further description of our provision and related income tax assets and liabilities. |
| Judgments and Uncertainties. In establishing a provision for income tax expense, we must make judgments and interpretations about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Disputes over interpretations of the tax laws may be subject to review/adjudication by the court systems of the various tax jurisdictions or may be settled with the taxing authority upon examination or audit. |
78
| Effect if Actual Results Differ From Assumptions. Although management believes that the judgments and estimates used are reasonable, actual results could differ and we may be exposed to losses or gains that could be material. To the extent we prevail in matters for which reserves have been established, or are required to pay amounts in excess of our reserves, our effective income tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would result in an increase in our effective income tax rate in the period of resolution. A favorable tax settlement would result in a reduction in our effective income tax rate in the period of resolution. |
| Description. The fair value of our securities is determined with reference to price estimates. In the absence of observable market inputs related to items such as cash flow assumptions or adjustments to market rates, management judgment is used. Different judgments and assumptions used in pricing could result in different estimates of value. |
| The length of time and the extent to which the fair value has been less than amortized cost; |
| The financial condition and near-term prospects of the issuer; |
| The underlying fundamentals of the relevant market and the outlook for such market for the near future; |
| Our intent to sell the debt security or whether it is more likely than not that we will be required to sell the debt security before its anticipated recovery; and |
| When applicable for purchased beneficial interests, the estimated cash flows of the securities are assessed for adverse changes. |
| Judgments and Uncertainties. The determination of other-than-temporary-impairment is a subjective process, and different judgments and assumptions could affect the timing and amount of loss realization. In addition, significant judgments are required in determining valuation and impairment, which include making assumptions regarding the estimated prepayments, loss assumptions and interest cash flows. |
| Effect if Actual Results Differ From Assumptions. Actual credit deterioration could be more or less severe than estimated. Upon subsequent review, if cash flows have significantly improved, the discount would be amortized into earnings over the remaining life of the debt security in a prospective manner based on the amount and timing of future cash flows. Additional credit deterioration resulting in an adverse change in cash flows would result in additional other-than-temporary impairment loss recorded in the income statement. |
79
| economic, market, operational, liquidity, credit and interest rate risks associated with our business; | |
| economic conditions generally and in the financial services industry; | |
| expected cost savings in connection with the consolidation of recent acquisitions may not be fully realized or realized within the expected time frames, and deposit attrition, customer loss and revenue loss following completed acquisitions may be greater than expected; | |
| unexpected difficulties and losses related to FDIC-assisted acquisitions, including those resulting from our loss-sharing arrangements with the FDIC; | |
| increased competition in the financial services industry either nationally or regionally, resulting in, among other things, credit quality deterioration; | |
| our ability to achieve loan and deposit growth; | |
| volatility and direction of market interest rates; | |
| governmental legislation and regulation, including changes in accounting regulation or standards; | |
| our ability to execute our business plan; | |
| a weakening of the economy which could materially impact credit quality trends and the ability to generate loans; | |
| changes in the securities markets; and | |
| changes in fiscal, monetary and tax policies. |
ITEM 3. | QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
80
ITEM 4. | CONTROLS AND PROCEDURES |
81
ITEM 1A. | RISK FACTORS |
| the time and costs associated with identifying potential new markets, as well as acquisition and merger targets; | ||
| the estimates and judgments used to evaluate credit, operations, management and market risks with respect to the target institution may not be accurate; | ||
| the time and costs of evaluating new markets, hiring experienced local management and opening new offices, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; | ||
| our ability to finance an acquisition and possible dilution to our existing shareholders; | ||
| the diversion of our managements attention to the negotiation of a transaction, and the integration of the operations and personnel of the combined businesses; | ||
| entry into new markets where we lack experience; | ||
| the introduction of new products and services into our business; | ||
| the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and | ||
| the risk of loss of key employees and customers. |
82
| loss of customers of the failed bank; | ||
| strain on management resources related to collection and management of problem loans; | ||
| problems related to integration of personnel and operating systems; | ||
| the ultimate collectability of claims with the FDIC under the shared loss agreement are dependent upon the performance of the underlying covered assets, the passage of time and our ability to service loans in accordance with the shared loss agreement; and | ||
| losses may exceed our estimates and move us into a tranche where we have 0% coverage under our loss sharing agreements with the FDIC. |
83
| Commercial Real Estate Loans. Repayment is dependent upon income being generated in amounts sufficient to cover operating expenses and debt service. | ||
| Commercial Loans. Repayment is dependent upon the successful operation of the borrowers business. | ||
| Consumer Loans. Consumer loans (such as personal lines of credit) are collateralized, if at all, with assets that may not provide an adequate source of payment of the loan due to depreciation, damage, or loss. | ||
| Agricultural Loans. Repayment is dependent upon the successful operation of the business, which is greatly dependent on many things outside the control of either Old National Bank or the borrowers. These factors include weather, commodity prices, and interest rates. |
84
85
86
| announcements of developments related to Old Nationals business; | ||
| fluctuations in Old Nationals results of operations; | ||
| sales or purchases of substantial amounts of Old Nationals securities in the marketplace; | ||
| general conditions in Old Nationals banking niche or the worldwide economy; | ||
| a shortfall or excess in revenues or earnings compared to securities analysts expectations; | ||
| changes in analysts recommendations or projections; and | ||
| Old Nationals announcement of new acquisitions or other projects. |
87
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number | ||||||||||||||||
of Shares | ||||||||||||||||
Total | Average | Purchased as | Maximum Number of | |||||||||||||
Number | Price | Part of Publically | Shares that May Yet | |||||||||||||
of Shares | Paid Per | Announced Plans | Be Purchased Under | |||||||||||||
Period | Purchased | Share | or Programs | the Plans or Programs | ||||||||||||
07/01/11 - 07/31/11 |
737 | $ | 10.56 | 737 | 2,216,788 | |||||||||||
08/01/11 - 08/31/11 |
| | | 2,216,788 | ||||||||||||
09/01/11 - 09/30/11 |
| | | 2,216,788 | ||||||||||||
Quarter-to-date
09/30/11 |
737 | $ | 10.56 | 737 | 2,216,788 | |||||||||||
ITEM 5. | OTHER INFORMATION |
(a) | None |
(b) | There have been no material changes in the procedure by which security holders recommend nominees to the Companys board of directors. |
ITEM 6. | EXHIBITS |
Exhibit No. | Description | |||
2.1 | Purchase and Assumption Agreement dated November 24, 2008 by and among Old National Bancorp, Old
National Bank and RBS Citizens, National Association (incorporated by reference to Exhibit 2.1 of Old
Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on November
25, 2008) and amended on March 20, 2009 (incorporated by reference to Exhibit 2.1 of Old Nationals
Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2009). |
|||
2.2 | Agreement and Plan of Merger dated as of October 5, 2010 by and among Old National Bancorp and Monroe
Bancorp (the schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K)
(incorporated by reference to Exhibit 2.1 of Old Nationals Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 6, 2010). |
|||
2.3 | Purchase and Assumption Agreement Whole Bank All Deposits, among Federal Deposit Insurance
Corporation, receiver of Integra Bank National Association, Evansville, Indiana, the Federal Deposit
Insurance Corporation and Old National Bank, dated July 29, 2011 (incorporated by reference to Exhibit
2.1 of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on
August 4, 2011). |
|||
3.1 | Articles of Incorporation of Old National, amended December 10, 2008 (incorporated by reference to
Exhibit 3.1 of Old Nationals Annual Report on Form 10-K for the year ended December 31, 2008). |
|||
3.2 | By-Laws of Old National, amended July 23, 2009 (incorporated by reference to Exhibit 3.2 of Old
Nationals Annual Report on Form 10-K for the year ended December 31, 2009). |
88
Exhibit No. | Description | |||
4.1 | Senior Indenture between Old National and The Bank of New York Trust Company (as successor to J.P.
Morgan Trust Company, National Association (as successor to Bank One, NA)), as trustee, dated as of
July 23, 1997 (incorporated by reference to Exhibit 4.3 to Old Nationals Registration Statement on
Form S-3, Registration No. 333-118374, filed with the Securities and Exchange Commission on December
2, 2004). |
|||
4.2 | Form of Indenture between Old National and J.P. Morgan Trust Company, National Association (as
successor to Bank One, NA), as trustee (incorporated by reference to Exhibit 4.1 to Old Nationals
Registration Statement on Form S-3, Registration No. 333-87573, filed with the Securities and Exchange
Commission on September 22, 1999). |
|||
4.3 | First Indenture Supplement dated as of May 20, 2005, between Old National and J.P. Morgan Trust
Company, as trustee, providing for the issuance of its 5.00% Senior Notes due 2010 (incorporated by
reference to Exhibit 4.1 of Old Nationals Current Report on Form 8-K filed with the Securities and
Exchange Commission on May 20, 2005). |
|||
4.4 | Form of 5.00% Senior Notes due 2010 (incorporated by reference to Exhibit 4.2 of Old Nationals
Current Report on Form 8-K filed with the Securities and Exchange Commission on May 20, 2005). |
|||
10.1 | Deferred Compensation Plan for Directors of Old National Bancorp and Subsidiaries (As Amended and
Restated Effective as of January 1, 2003) (incorporated by reference to Exhibit 10(a) of Old
Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on December
15, 2004).* |
|||
10.2 | Second Amendment to the Deferred Compensation Plan for Directors of Old National Bancorp and
Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to
Exhibit 10(b) of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 15, 2004).* |
|||
10.3 | 2005 Directors Deferred Compensation Plan (Effective as of January 1, 2005) (incorporated by reference
to Exhibit 10(c) of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 15, 2004).* |
|||
10.4 | Supplemental Deferred Compensation Plan for Select Executive Employees of Old National Bancorp and
Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to
Exhibit 10(d) of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 15, 2004).* |
|||
10.5 | Second Amendment to the Supplemental Deferred Compensation Plan for Select Executive Employees of Old
National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003)
(incorporated by reference to Exhibit 10(e) of Old Nationals Current Report on Form 8-K filed with
the Securities and Exchange Commission on December 15, 2004).* |
|||
10.6 | Third Amendment to the Supplemental Deferred Compensation Plan for Select Executive Employees of Old
National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003)
(incorporated by reference to Exhibit 10(f) of Old Nationals Current Report on Form 8-K filed with
the Securities and Exchange Commission on December 15, 2004).* |
|||
10.7 | 2005 Executive Deferred Compensation Plan (Effective as of January 1, 2005) (incorporated by reference
to Exhibit 10(g) of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 15, 2004).* |
|||
10.8 | Summary of Old National Bancorps Outside Director Compensation Program (incorporated by reference to
Old Nationals Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).* |
|||
10.9 | Form of Executive Stock Option Award Agreement between Old National and certain key associates
(incorporated by reference to Exhibit 10(h) of Old Nationals Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004).* |
89
Exhibit No. | Description | |||
10.10 | Form of 2006 Performance-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 99.1 of Old Nationals Current Report on Form 8-K
filed with the Securities and Exchange Commission on March 2, 2006).* |
|||
10.11 | Form of 2006 Service-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 99.2 of Old Nationals Current Report on Form 8-K
filed with the Securities and Exchange Commission on March 2, 2006).* |
|||
10.12 | Form of 2006 Non-qualified Stock Option Agreement (incorporated by reference to Exhibit 99.3 of Old
Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on March 2,
2006).* |
|||
10.13 | Form of 2007 Performance-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 10(w) of Old Nationals Annual Report on Form 10-K
for the year ended December 31, 2006).* |
|||
10.14 | Form of 2007 Service-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 10(x) of Old Nationals Annual Report on Form 10-K
for the year ended December 31, 2006).* |
|||
10.15 | Form of 2007 Non-qualified Stock Option Agreement between Old National and certain key associates
(incorporated by reference to Exhibit 10(y) of Old Nationals Annual Report on Form 10-K for the year
ended December 31, 2006).* |
|||
10.16 | Lease Agreement, dated December 20, 2006 between ONB One Main Landlord, LLC and Old National Bank
(incorporated by reference to Exhibit 10(aa) of Old Nationals Annual Report on Form 10-K for the year
ended December 31, 2006). |
|||
10.17 | Lease Agreement, dated December 20, 2006 between ONB 123 Main Landlord, LLC and Old National Bank
(incorporated by reference to Exhibit 10(ab) of Old Nationals Annual Report on Form 10-K for the year
ended December 31, 2006). |
|||
10.18 | Lease Agreement, dated December 20, 2006 between ONB 4th Street Landlord, LLC and Old
National Bank (incorporated by reference to Exhibit 10(ac) of Old Nationals Annual Report on Form
10-K for the year ended December 31, 2006). |
|||
10.19 | Master Lease Agreement dated September 19, 2007, by and between ONB CTL Portfolio Landlord #1, LLC,
and Old National Bank (incorporated by reference to Exhibit 99.2 of Old Nationals Current Report on
Form 8-K filed with the Securities and Exchange Commission on September 25, 2007).
|
|||
10.20 | Lease Supplement No. 1 dated September 19, 2007, by and between ONB CTL Portfolio Landlord #1, LLC,
Old National Bank and ONB Insurance Group, Inc. (incorporated by reference to Exhibit 99.3 of
Old Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on
September 25, 2007). |
|||
10.21 | Master Lease Agreement dated September 19, 2007, by and between ONB CTL Portfolio Landlord #2, LLC,
and Old National Bank (incorporated by reference to Exhibit 99.4 of Old Nationals Current Report on
Form 8-K filed with the Securities and Exchange Commission on September 25, 2007). |
90
Exhibit No. | Description | |||
10.22 | Master Lease Agreement dated September 19, 2007, by and between ONB CTL Portfolio Landlord #3, LLC,
and Old National Bank (incorporated by reference to Exhibit 99.5 of Old Nationals Current Report on
Form 8-K filed with the Securities and Exchange Commission on September 25, 2007). |
|||
10.23 | Master Lease Agreement dated September 19, 2007, by and between ONB CTL Portfolio Landlord #4, LLC,
and Old National Bank (incorporated by reference to Exhibit 99.6 of Old Nationals Current Report on
Form 8-K filed with the Securities and Exchange Commission on September 25, 2007). |
|||
10.24 | Master Lease Agreement dated September 19, 2007, by and between ONB CTL Portfolio Landlord #5, LLC,
and Old National Bank (incorporated by reference to Exhibit 99.7 of Old Nationals Current Report on
Form 8-K filed with the Securities and Exchange Commission on September 25, 2007). |
|||
10.25 | Form of Lease Agreement dated October 19, 2007 entered into by affiliates of Old National Bancorp and
affiliates of SunTrust Equity Funding, LLC (incorporated by reference to Exhibit 99.2 of Old
Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on October
25, 2007). |
|||
10.26 | Form of Lease Agreement dated December 27, 2007 entered into by affiliates of Old National Bancorp and
affiliates of SunTrust Equity Funding, LLC (as incorporated by reference to Exhibit 99.2 of Old
Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on December
31, 2007). |
|||
10.27 | Form of 2008 Non-qualified Stock Option Award Agreement (incorporated by reference to Exhibit 99.1 of
Old Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on January
30, 2008).* |
|||
10.28 | Form of 2008 Performance-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 99.2 of Old Nationals Current Report on Form 8-K
filed with the Securities and Exchange Commission on January 30, 2008).* |
|||
10.29 | Form of 2008 Service-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 99.3 of Old Nationals Current Report on Form 8-K
filed with the Securities and Exchange Commission on January 30, 2008).* |
|||
10.30 | Old National Bancorp 2008 Incentive Compensation Plan (incorporated by reference to Appendix II of Old
Nationals Definitive Proxy Statement filed with the Securities and Exchange Commission on March 27,
2008).* |
|||
10.31 | Old National Bancorp Code of Conduct (incorporated by reference to Exhibit 14.1 of Old Nationals
Current Report on Form 8-K filed with the Securities and Exchange Commission on October 29, 2008). |
|||
10.32 | Letter Agreement dated December 12, 2008 by and between Old National Bancorp and the United States
Department of Treasury which includes the Securities Purchase Agreement Standard Terms
(incorporated by reference to Exhibit 10.1 of Old Nationals Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 12, 2008). |
|||
10.33 | Form of 2009 Performance Share Award Agreement Internal Performance Measures between Old National
and certain key associates (incorporated by reference to Old Nationals Current Report on Form 8-K/A
filed with the Securities and Exchange Commission on February 13, 2009).* |
|||
10.34 | Form of 2009 Performance Share Award Agreement Relative Performance Measures between Old National
and certain key associates (incorporated by reference to Old Nationals Current Report on Form 8-K/A
filed with the Securities and Exchange Commission on February 13, 2009).* |
|||
10.35 | Form of 2009 Service-Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Old Nationals Current Report on Form 8-K/A filed with the
Securities and Exchange Commission on February 13, 2009).* |
91
Exhibit No. | Description | |||
10.36 | Form of 2009 Executive Stock Option Agreement between Old National and certain key associates
(incorporated by reference to Old Nationals Current Report on Form 8-K/A filed with the Securities
and Exchange Commission on February 13, 2009).* |
|||
10.37 | Preferred Stock Repurchase Agreement dated March 31, 2009 by and between Old National Bancorp and the
United States Department of Treasury (incorporated by reference to Exhibit 10.1 of Old Nationals
Current Report on Form 8-K filed with the Securities and Exchange Commission on March 31, 2009). |
|||
10.38 | Warrant Repurchase Agreement dated May 8, 2009 by and between Old National Bancorp and the United
States Department of Treasury (incorporated by reference to Exhibit 10.1 of Old Nationals Current
Report on Form 8-K filed with the Securities and Exchange Commission on May 11, 2009). |
|||
10.39 | Stock Purchase and Dividend Reinvestment Plan (incorporated by reference to Old Nationals
Registration Statement on Form S-3, Registration No. 333-161394 filed with the Securities and Exchange
Commission on August 17, 2009). |
|||
10.40 | Purchase Agreement dated September 17, 2009 between National City Commercial Capital Company, LLC, Old
National Bank and Indiana Old National Insurance Company (incorporated by reference to Exhibit 10.01
of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on
September 18, 2009). |
|||
10.41 | Servicing Agreement dated September 17, 2009 between National City Commercial Capital Company, LLC,
Old National Bank and Indiana Old National Insurance Company (incorporated by reference to Exhibit
10.02 of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission
on September 18, 2009). |
|||
10.42 | Form of 2010 Performance Share Award Agreement Internal Performance Measures between Old National
and certain key associates (incorporated by reference to Exhibit 10(as) of Old Nationals Annual
Report on Form 10-K for the year ended December 31, 2009).* |
|||
10.43 | Form of 2010 Performance Share Award Agreement Relative Performance Measures between Old National
and certain key associates (incorporated by reference to Exhibit 10(at) of Old Nationals Annual
Report on Form 10-K for the year ended December 31, 2009).* |
|||
10.44 | Form of 2010 Service Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 10(au) of Old Nationals Annual Report on Form 10-K
for the year ended December 31, 2009).* |
|||
10.45 | Voting agreement by and among directors of Monroe Bancorp (incorporated by reference to Exhibit 10.1
of Old Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on
October 6, 2010).* |
|||
10.46 | Form of Employment Agreement for Robert G. Jones (incorporated by reference to Exhibit 10.1 of Old
Nationals Current Report on Form 8-K filed with the Securities and Exchange Commission on January 27,
2011).* |
|||
10.47 | Form of Employment Agreement for Barbara A Murphy, Christopher A. Wolking, Allen R. Mounts and Daryl
D. Moore (incorporated by reference to Exhibit 10.2 of Old Nationals Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 27, 2011).* |
|||
10.48 | Form of 2011 Performance Share Award Agreement Internal Performance Measures between Old National
and certain key associates (incorporated by reference to Exhibit 10(av) of Old Nationals Annual
Report on Form 10-K for the year ended December 31, 2010).* |
|||
10.49 | Form of 2011 Performance Share Award Agreement Relative Performance Measures between Old National
and certain key associates (incorporated by reference to Exhibit 10(aw) of Old Nationals Annual
Report on Form 10-K for the year ended December 31, 2010).* |
92
Exhibit No. | Description | |||
10.50 | Form of 2011 Service Based Restricted Stock Award Agreement between Old National and certain key
associates (incorporated by reference to Exhibit 10(ax) of Old Nationals Annual Report on Form 10-K
for the year ended December 31, 2010).* |
|||
10.51 | Old National Bank Cash-Settled Value Appreciation Instrument, dated July 29, 2011 (incorporated by
reference to Exhibit 10.1 of Old Nationals Current Report on Form 8-K filed with the Securities and
Exchange Commission on August 4, 2011). |
|||
10.52 | Old National Bancorp 2011 Incentive Compensation Plan is filed herewith.* |
|||
31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|||
31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|||
32.1 | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
32.2 | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
101 | The following materials from Old National Bancorps Form 10-Q Report for the quarterly period ended
September 30, 2011, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated
Statements of Income, (iii) the Consolidated Statements of Changes in Shareholders Equity, (iv) the
Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.** |
* | Management contract or compensatory plan or arrangement | |
** | Furnished, not filed |
93
OLD NATIONAL BANCORP | ||||
(Registrant) | ||||
By:
|
/s/ Christopher A. Wolking
|
|||
Senior Executive Vice President and Chief Financial Officer Duly Authorized Officer and Principal Financial Officer |
||||
Date: November 8, 2011 |
94
PLAN PURPOSE |
2 | |||
PLAN OBJECTIVES |
2 | |||
ELIGIBILITY |
2 | |||
TIMING AND METHOD OF PAYMENTS |
2 | |||
CONTINUED EMPLOYMENT REQUIREMENT |
2 | |||
PLAN DESIGN |
||||
PERFORMANCE MEASURE |
3 | |||
NET INCOME SCHEDULE |
3 | |||
CALCULATION |
3 | |||
ELIGIBLE EARNINGS |
3 | |||
INDIVIDUAL AWARDS |
4 | |||
PLAN ADMINISTRATION |
4 |
1
| Reward associates for corporate performance in excess of budgeted goals |
| Ensure the cost of the plan is fully funded by the Companys financial performance |
| Keep the plan design simple |
| Allow for adjustment for individual performance |
| Ensure the plan does not create risks that are likely to have a materially adverse
impact on the Company |
2
Net Income | % of Prior Plan | |||||||||||
Level | ($000) | % of Budget | Incentive Target | |||||||||
Level 1 (Threshold) |
47,744 | 100 | % | 25 | % | |||||||
Level 2 |
51,086 | 107 | % | 35 | % | |||||||
Level 3 |
54,450 | 114 | % | 45 | % | |||||||
Level 4 (Maximum) |
57,771 | 121 | % | 50 | % |
3
4
1. | I have reviewed this quarterly report on Form 10-Q of Old National Bancorp; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 8, 2011 | By: | /s/ Robert G. Jones | ||
Robert G. Jones | ||||
President and Chief Executive Officer (Principal Executive Officer) |
||||
1. | I have reviewed this quarterly report on Form 10-Q of Old National Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 8, 2011 | By: | /s/ Christopher A. Wolking | ||
Christopher A. Wolking | ||||
Chief Financial Officer (Principal Financial Officer) |
||||
By:
|
/s/ Robert G. Jones
|
|||
Chief Executive Officer | ||||
(Principal Executive Officer) | ||||
November 8, 2011 |
By:
|
/s/ Christopher A. Wolking
|
|||
Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
November 8, 2011 |
Financing Activities (Other Borrowings) (Details) (USD $) In Thousands, unless otherwise specified | 9 Months Ended | 9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
Minimum [Member]
Junior Subordinated Debenture [Member] | Sep. 30, 2011
Minimum [Member]
Federal Home Loan Bank Advances [Member] | Sep. 30, 2011
Maximum [Member]
Junior Subordinated Debenture [Member] | Sep. 30, 2011
Maximum [Member]
Federal Home Loan Bank Advances [Member] | Sep. 30, 2011
Securities Sold Under Agreements To Repurchase [Member] | Sep. 30, 2011
Junior Subordinated Debenture [Member] | Sep. 30, 2011
Subordinated Notes [Member] | Sep. 30, 2011
Subordinated Notes [Member]
Old National Bancorp [Member] | Sep. 30, 2011
Federal Home Loan Bank Advances [Member] | Sep. 30, 2011
Subordinated Bank Notes [Member] | Sep. 30, 2011
Subordinated Bank Notes [Member]
Old National Bank [Member] | Sep. 30, 2011
Old National Bancorp [Member] | Dec. 31, 2010
Old National Bancorp [Member] | Sep. 30, 2011
Old National Bank [Member] | Dec. 31, 2010
Old National Bank [Member] | |
Junior subordinated debenture (variable rates of 2.12% to 3.42% and fixed rates of 6.52% to 7.15%) maturing July 2033 to June 2037 | $ 16,000 | $ 8,000 | |||||||||||||||
Subordinated bank notes | 13,000 | 0 | 150,000 | 150,000 | |||||||||||||
ASC 815 fair value hedge and other basis adjustments | (2,844) | (36) | 2,449 | (2,056) | |||||||||||||
Securities sold under agreements to repurchase (variable rate 3.05%) maturing October 2014 | 50,000 | 50,000 | |||||||||||||||
Federal Home Loan Bank advances (fixed rates 1.24% to 8.34% and variable rate 2.53%) maturing June 2012 to January 2023 | 211,006 | 211,696 | |||||||||||||||
Capital lease obligation | 4,273 | 4,307 | |||||||||||||||
Total other borrowings | $ 443,884 | $ 421,911 | |||||||||||||||
Variable rates | 2.12% | 3.42% | 3.05% | 2.53% | |||||||||||||
Fixed rates | 6.52% | 1.24% | 7.15% | 8.34% | 10.00% | 6.75% | |||||||||||
Maturity, Start date | July 2033 | June 2012 | |||||||||||||||
Maturity, End date | June 2037 | January 2023 | |||||||||||||||
Maturity date | Oct. 01, 2014 | Jun. 01, 2019 | Oct. 01, 2011 |
Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 |
---|---|---|---|
Investment securities - held-to-maturity, at amortized cost (fair value) | $ 517,427 | $ 625,643 | $ 770,688 |
Common stock, stated value | $ 1 | $ 1 | $ 1 |
Common stock, shares authorized | 150,000 | 150,000 | 150,000 |
Common stock, shares issued | 94,752 | 87,183 | 87,172 |
Common stock, shares outstanding | 94,752 | 87,183 | 87,172 |
Preferred Stock, Series A [Member] | |||
Preferred stock, shares authorized | 1,000 | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Covered Loans (Narrative) (Details) (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | |
Covered Loans | |||
Covered loans | $ 711,266,000 | $ 0 | $ 0 |
Allowance for loan losses related to the acquired loans | 0 | ||
Fair value of the indemnification asset | $ 168,100,000 |
Financing Activities (Future Minimum Lease Payments Under The Capital Lease) (Details) (USD $) In Thousands | Sep. 30, 2011 |
---|---|
Financing Activities | |
2011 remaining | $ 97 |
2012 | 390 |
2013 | 390 |
2014 | 410 |
2015 | 410 |
Thereafter | 10,494 |
Total minimum lease payments | 12,191 |
Less amounts representing interest | 7,918 |
Present value of net minimum lease payments | $ 4,273 |
Income Taxes (Summary Of Differences In Taxes From Continuing Operations) (Details) (USD $) In Thousands, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Income Taxes | ||||
Provision at statutory rate of 35% | $ 8,695 | $ 4,776 | $ 24,058 | $ 13,185 |
Tax-exempt income | (2,421) | (2,416) | (7,182) | (7,749) |
Reversal of portion of unrecognized tax benefits | (623) | (652) | (623) | (652) |
State income taxes | 1,196 | 228 | 2,292 | 475 |
Interim period effective rate adjustment | 888 | 0 | 89 | 0 |
Other, net | 310 | (187) | (144) | (77) |
Income tax expense | $ 8,045 | $ 1,749 | $ 18,490 | $ 5,182 |
Effective tax rate | 32.40% | 12.80% | 26.90% | 13.80% |
Statutory percentage rate of provision | 35.00% |
Derivative Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | NOTE 17 - DERIVATIVE FINANCIAL INSTRUMENTS As part of the Company's overall interest rate risk management, Old National uses derivative instruments, including interest rate swaps, caps and floors. The notional amount of these derivative instruments was $195.0 million at both September 30, 2011 and December 31, 2010, respectively. The September 30, 2011 balances consist of $95.0 million notional amount of receive-fixed interest rate swaps on certain of its FHLB advances and $100.0 million notional amount of receive-fixed interest rate swaps on certain commercial loans. The December 31, 2010 balances consist of $95.0 million notional amount of receive-fixed interest rate swaps on certain of its FHLB advances and $100.0 million notional amount of receive-fixed interest rate swaps on certain commercial loans. These hedges were entered into to manage both interest rate risk and asset sensitivity on the balance sheet. These derivative instruments are recognized on the balance sheet at their fair value. In addition, commitments to fund certain mortgage loans (interest rate lock commitments) and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. At September 30, 2011, the notional amount of the interest rate lock commitments and forward commitments were $8.7 million and $11.2 million, respectively. At December 31, 2010, the notional amount of the interest rate lock commitments and forward commitments were $7.7 million and $9.3 million, respectively. It is the Company's practice to enter into forward commitments for the future delivery of residential mortgage loans to third party investors when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitment to fund the loans. All derivative instruments are recognized on the balance sheet at their fair value. Old National also enters into derivative instruments for the benefit of its customers. The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $457.9 million and $457.9 million, respectively, at September 30, 2011. Included in the notional amounts at September 30, 2011 is $67.7 million of customer derivative instruments assumed in the Integra acquisition. At December 31, 2010, the notional amounts of the customer derivative instruments and the offsetting counterparty derivative instruments were $419.2 million and $419.2 million, respectively. These derivative contracts do not qualify for hedge accounting. These instruments include interest rate swaps, caps, foreign exchange forward contracts and commodity swaps and options. Commonly, Old National will economically hedge significant exposures related to these derivative contracts entered into for the benefit of customers by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. Old National's exposure is limited to the replacement 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, the Company minimizes credit risk through credit approvals, limits, and monitoring procedures. The following tables summarize the fair value of derivative financial instruments utilized by Old National:
The effect of derivative instruments on the Consolidated Statement of Income for the three and nine months ended September 30, 2011 and 2010 are as follows:
(1) Amounts represent the net interest payments as stated in the contractual agreements. (2) Amounts represent ineffectiveness on derivatives designated as fair value hedges. (3) Includes the valuation differences between the customer and offsetting counterparty swaps. See Note 21 to the consolidated financial statements. |
Document And Entity Information | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Document And Entity Information | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2011 |
Document Fiscal Year Focus | 2011 |
Document Fiscal Period Focus | Q3 |
Entity Registrant Name | OLD NATIONAL BANCORP /IN/ |
Entity Central Index Key | 0000707179 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 94,752,000 |
Net Income Per Share (Summary Of Table Reconciling Basic And Diluted Net Income Per Share) (Details) (USD $) In Thousands, except Share data | 3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||
Basic Earnings Per Share, Net income | $ 16,797 | $ 11,896 | $ 50,246 | $ 32,488 | ||||||||
Basic Earnings Per Share, Weighted average common shares outstanding | 94,492,000 | 86,795,000 | 94,468,000 | 86,778,000 | ||||||||
Basic Earnings Per Share | $ 0.18 | $ 0.13 | $ 0.53 | $ 0.37 | ||||||||
Diluted Earnings Per Share, Net income | $ 16,797 | $ 11,896 | $ 50,246 | $ 32,488 | ||||||||
Diluted Earnings Per Share, Weighted average common shares outstanding | 94,492,000 | 86,795,000 | 94,468,000 | 86,778,000 | ||||||||
Diluted Earnings Per Share, Weighted average shares outstanding | 94,785,000 | 86,931,000 | 94,722,000 | 86,890,000 | ||||||||
Diluted Earnings Per Share | $ 0.18 | $ 0.13 | $ 0.53 | $ 0.37 | ||||||||
Outstanding options | 4,626 | 6,001 | 4,605 | 6,001 | ||||||||
Restricted Stock [Member] | ||||||||||||
Effect of dilutive securities: Restricted Stock | 277,000 | [1] | 126,000 | [1] | 233,000 | [1] | 101,000 | [1] | ||||
Antidilutive securities were not included in the computation of net income per diluted share | 2 | 0 | 5 | 70 | ||||||||
Stock Options [Member] | ||||||||||||
Effect of dilutive securities: Stock Options | 16,000 | [2] | 10,000 | [2] | 21,000 | [2] | 11,000 | [2] | ||||
Diluted Earnings Per Share, Weighted average shares outstanding | 94,785,000 | 86,931,000 | ||||||||||
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Segment Information | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Information | NOTE 20 - SEGMENT INFORMATION Old National operates in two operating segments: community banking and treasury. The community banking segment serves customers in both urban and rural markets providing a wide range of financial services including commercial, real estate and consumer loans; lease financing; checking, savings, time deposits and other depository accounts; cash management services; and debit cards and other electronically accessed banking services and Internet banking. Treasury manages investments, wholesale funding, interest rate risk, liquidity and leverage for Old National. Additionally, treasury provides other miscellaneous capital markets products for its corporate banking clients. Other is comprised of the parent company and several smaller business units including insurance, wealth management and brokerage. It includes unallocated corporate overhead and intersegment revenue and expense eliminations. In order to measure performance for each segment, Old National allocates capital and corporate overhead to each segment. Capital and corporate overhead are allocated to each segment using various methodologies, which are subject to periodic changes by management. Intersegment sales and transfers are not significant. Old National uses a funds transfer pricing ("FTP") system to eliminate the effect of interest rate risk from net interest income in the community banking segment and from companies included in the "other" column. The FTP system is used to credit or charge each segment for the funds the segments create or use. The net FTP credit or charge is reflected in segment net interest income. The financial information for each operating segment is reported on the basis used internally by Old National's management to evaluate performance and is not necessarily comparable with similar information for any other financial institution. Summarized financial information concerning segments is shown in the following table for the three and nine months ended September 30:
Included in net interest income for the three and nine months ended September 30, 2011 in the Community Banking segment is approximately $21.0 million and $38.7 million, respectively, associated with the acquisition of Monroe Bancorp and Integra Bank. The decrease in provision for loan losses is primarily attributable to the changing portfolio mix and improved risk profile. Noninterest expense for the three and nine months ended September 30, 2011 includes $16.0 million and $31.0 million, respectively, of costs associated with the addition of Monroe Bancorp and Integra Bank. Included in income before income taxes for the three and nine months ended September 30, 2011 is $10.6 million and $15.0 million, respectively, associated with the addition of Monroe Bancorp and Integra Bank. |
Acquisition And Divestiture Activity (Schedule Of Components of Estimated Fair Value Of Intangible Assets) (Details) (USD $) In Millions, unless otherwise specified | 9 Months Ended |
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Sep. 30, 2011 | |
Core Deposit [Member] | |
Estimated Fair Value | $ 8.2 |
Estimated Useful Lives (Years) | 10 |
Customer Trust Relationships [Member] | |
Estimated Fair Value | $ 2.3 |
Estimated Useful Lives (Years) | 12 |
Goodwill And Other Intangible Assets (Schedule Of Changes In The Carrying Amount Of Goodwill) (Details) (USD $) In Thousands | 9 Months Ended | |
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Sep. 30, 2011 | Sep. 30, 2010 | |
Beginning Balance | $ 167,884 | $ 167,884 |
Goodwill acquired during the period | 98,101 | 0 |
Ending Balance | 265,985 | 167,884 |
Community Banking [Member] | ||
Beginning Balance | 128,011 | 128,011 |
Goodwill acquired during the period | 97,209 | 0 |
Ending Balance | 225,220 | 128,011 |
Other Segment [Member] | ||
Beginning Balance | 39,873 | 39,873 |
Goodwill acquired during the period | 892 | 0 |
Ending Balance | $ 40,765 | $ 39,873 |
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Investment Securities | NOTE 6 - INVESTMENT SECURITIES The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolio at September 30, 2011 and December 31, 2010 and the corresponding amounts of unrealized gains and losses therein:
All of the mortgage-backed securities in the investment portfolio are residential mortgage-backed securities. The amortized cost and fair value of the investment securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Weighted average yield is based on amortized cost.
The following table summarizes the investment securities with unrealized losses at September 30, 2011 and December 31, 2010 by aggregated major security type and length of time in a continuous unrealized loss position:
Proceeds from sales and calls of securities available for sale were $763.5 million and $882.0 million for the nine months ended September 30, 2011 and 2010, respectively. Gains of $6.0 million and $13.1 million were realized on these sales during 2011 and 2010, respectively, and offsetting losses of $1.0 million and $0.3 million were realized on these sales during 2011 and 2010. Also included in net securities gains for the first nine months of 2011 is $1 thousand of gains associated with the trading securities and other-than-temporary impairment charges related to credit loss on three non-agency mortgage-backed securities in the amount of $0.5 million, described below. Impacting earnings in the first nine months of 2010 were other-than-temporary impairment charges related to credit loss on two pooled trust preferred securities and ten non-agency mortgage-backed securities in the amount of $3.3 million. Trading securities, which consist of mutual funds held in a trust associated with deferred compensation plans for former Monroe Bancorp directors and executives, are recorded at fair value and totaled $2.8 million at September 30, 2011. Management evaluates securities for other-than-temporary impairment ("OTTI") at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available-for-sale or held-to-maturity are generally evaluated for OTTI under FASB ASC 320 (SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities). However, certain purchased beneficial interests, including non-agency mortgage-backed securities, asset-backed securities, and collateralized debt obligations, that had credit ratings at the time of purchase of below AA are evaluated using the model outlined in FASB ASC 325-10 (EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transfer in Securitized Financial Assets). In determining OTTI under the FASB ASC 320 (SFAS No. 115) model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. The second segment of the portfolio uses the OTTI guidance provided by FASB ASC 325-10 (EITF 99-20) that is specific to purchased beneficial interests that, on the purchase date, were rated below AA. Under the FASB ASC 325-10 model, the Company compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. An OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows. When other-than-temporary-impairment occurs under either model, the amount of the other-than-temporary-impairment recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary-impairment shall be recognized in earnings equal to the entire difference between the investment's amortized cost basis and its fair value at the balance sheet date. Otherwise, the other-than-temporary-impairment shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total other-than-temporary-impairment related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total other-than-temporary-impairment related to other factors shall be recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the other-than-temporary-impairment recognized in earnings shall become the new amortized cost basis of the investment. As of September 30, 2011, Old National's security portfolio consisted of 1,060 securities, 64 of which were in an unrealized loss position. The majority of unrealized losses are related to the Company's non-agency mortgage-backed and pooled trust preferred securities, as discussed below: Non-agency Mortgage-backed Securities At September 30, 2011, the Company's securities portfolio contained 14 non-agency collateralized mortgage obligations with a fair value of $95.1 million which had net unrealized losses of approximately $3.5 million. All of these securities are residential mortgage-backed securities. These non-agency mortgage-backed securities were rated AAA at purchase and are not within the scope of FASB ASC 325-10 (EITF 99-20). As of September 30, 2011, nine of these securities were rated below investment grade with grades ranging from B to CC. One of the nine securities is rated B and has a fair value of $14.3 million, three of the securities are rated CCC with a fair value of $27.8 million and five of the securities are rated CC with a fair value of $36.4 million. These securities were evaluated to determine if the underlying collateral is expected to experience loss, resulting in a principal loss of the notes. As part of the evaluation, a detailed analysis of deal-specific data was obtained from remittance reports provided by the trustee and data from the servicer. The collateral was broken down into several distinct buckets based on loan performance characteristics in order to apply different assumptions to each bucket. The most significant drivers affecting loan performance were examined including original loan-to-value ("LTV"), underlying property location and the loan status. The loans in the current status bucket were further divided based on their original LTV: a high-LTV and a low-LTV group to which different default curves and severity percentages were applied. The high-LTV group was further bifurcated into loans originated in high-risk states and all other states with a higher default-curve and severity percentages being applied to loans originated in the high-risk states. Different default curves and severity rates were applied to the remaining non-current collateral buckets. Using these collateral-specific assumptions, a model was built to project the future performance of the instrument. Based on this analysis of the underlying collateral, Old National recorded $0.5 million of credit losses on three of these securities for the nine months ended September 30, 2011. The fair value of these non-agency mortgage-backed securities remaining at September 30, 2011 was $78.5 million. Based on an analysis of the underlying collateral, Old National recorded $3.0 million of credit losses on ten nonagency mortgage-backed securities for the nine months ended September 30, 2010. The fair value of these nonagency mortgage-backed securities was $97.7 million at September 30, 2010. Pooled Trust Preferred Securities At September 30, 2011, the Company's securities portfolio contained nine pooled trust preferred securities with a fair value of $7.5 million and unrealized losses of $19.8 million. Seven of the pooled trust preferred securities in our portfolio fall within the scope of FASB ASC 325-10 (EITF 99-20) and have a fair value of $4.8 million with unrealized losses of $8.3 million at September 30, 2011. These securities were rated A2 and A3 at inception, but at September 30, 2011, one security was rated BB, four securities were rated C and two securities D. The issuers in these securities are primarily banks, but some of the pools do include a limited number of insurance companies. The Company uses the OTTI evaluation model to compare the present value of expected cash flows to the previous estimate to determine whether an adverse change in cash flows has occurred during the quarter. The OTTI model considers the structure and term of the collateralized debt obligation ("CDO") and the financial condition of the underlying issuers. Specifically, the model details interest rates, principal balances of note classes and underlying issuers, the timing and amount of interest and principal payments of the underlying issuers, and the allocation of the payments to the note classes. The current estimate of expected cash flows is based on the most recent trustee reports and any other relevant market information including announcements of interest payment deferrals or defaults of underlying trust preferred securities. Assumptions used in the model include expected future default rates and prepayments. We assume no recoveries on defaults and a limited number of recoveries on current or projected interest payment deferrals. In addition, we use the model to "stress" each CDO, or make assumptions more severe than expected activity, to determine the degree to which assumptions could deteriorate before the CDO could no longer fully support repayment of Old National's note class. For the nine months ended September 30, 2011, our model indicated no other-than-temporary-impairment losses on these securities. Two of our pooled trust preferred securities with a fair value of $2.7 million and unrealized losses of $11.5 million at September 30, 2011 are not subject to FASB ASC 325-10. These securities are evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows. Our analysis indicated no other-than-temporary-impairment on these securities. For the nine months ended September 30, 2010, our model indicated other-than-temporary-impairment losses on two securities of $0.3 million, which was recorded as a credit loss in earnings. At September 30, 2010, the fair value of these two securities was $1.1 million and they remained classified as available for sale. The two pooled trust preferred securities which were not subject to FASB ASC 325-10 had a fair value of $3.6 million and unrealized losses of $10.5 million at September 30, 2010. These securities were evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows. Our analysis indicated no other-than-temporary-impairment on these securities. The table below summarizes the relevant characteristics of our nine pooled trust preferred securities as well as four single issuer trust preferred securities. Each of the pooled trust preferred securities support a more senior tranche of security holders except for the MM Community Funding II security which, due to payoffs, Old National is now in the most senior class. As depicted in the table below, all nine securities have experienced credit defaults. However, three of these securities have excess subordination and are not other-than-temporarily-impaired as a result of their class hierarchy which provides more loss protection.
(1) Lowest rating for the security provided by any nationally recognized credit rating agency. The following table details all securities with other-than-temporary-impairment, their credit rating at September 30, 2011 and the related credit losses recognized in earnings: (1) Lowest rating for the security provided by any nationally recognized credit rating agency.
The following table details all securities with other-than-temporary-impairment, their credit rating at September 30, 2010 and the related credit losses recognized in earnings: (1) Lowest rating for the security provided by any nationally recognized credit rating agency.
The following table details all securities with other-than-temporary-impairment, their credit rating at September 30, 2011, and the related credit losses recognized in earnings: (1) Lowest rating for the security provided by any nationally recognized credit rating agency. (2) Sold during fourth quarter 2010. (3) Sold during first quarter 2011.
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Fair Value |
NOTE 21 – FAIR VALUE FASB ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values: · Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. · Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. · Level 3 – Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. Old National used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Trading securities: The fair value for trading securities is determined by quoted market prices (Level 1). Investment securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using swap and libor curves plus spreads that adjust for loss severities, volatility, credit risk and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations. Residential loans held for sale: The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). Derivative financial instruments: The fair values of derivative financial instruments are based on derivative valuation models using market data inputs as of the valuation date (Level 2). Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:
There were no significant transfers into or out of Level 1, Level 2 or Level 3 assets or liabilities during the nine months ended September 30, 2011.
The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2011:
Included in the income statement is $49 thousand of expense included in interest income from the amortization of premiums on securities. The increase in fair value is reflected in the balance sheet as an increase in the fair value of investment securities available-for sale, an increase in accumulated other comprehensive income, which is included in shareholders' equity, and a decrease in other assets related to the tax impact. The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2010:
Included in the income statement are $86 thousand of expense included in interest income from the amortization of premiums on securities and $311 thousand of credit losses included in noninterest income. The decrease in fair value is reflected in the balance sheet as a decrease in the fair value of investment securities available-for sale, a decrease in accumulated other comprehensive income, which is included in shareholders' equity, and an increase in other assets related to the tax impact.
Impaired commercial and commercial real estate loans that are deemed collateral dependent are valued based on the fair value of the underlying collateral. These estimates are based on the most recently available real estate appraisals with certain adjustments made based on the type of property, age of appraisal, current status of the property and other related factors to estimate the current value of the collateral. These impaired commercial and commercial real estate loans had a principal amount of $55.4 million, with a valuation allowance of $16.3 million at September 30, 2011. Old National recorded $10.3 million of provision expense associated with these loans for the nine months ended September 30, 2011.
As of December 31, 2010, impaired commercial and commercial real estate loans had a principal amount of $36.4 million, with a valuation allowance of $13.6 million. Old National recorded $7.1 million of provision expense associated with these loans in 2010. Financial instruments recorded using fair value option Under FASB ASC 825-10, the Company may elect to report most financial instruments and certain other items at fair value on an instrument-by instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election may not be revoked once an election is made. The Company has elected the fair value option for residential mortgage loans held for sale. For these loans, interest income is recorded in the consolidated statements of income based on the contractual amount of interest income earned on the financial assets (except any that are on nonaccrual status). None of these loans are 90 days or more past due, nor are any on nonaccrual status. Included in the income statement are $41 thousand and $141 thousand of interest income for residential loans held for sale for the three and nine months ended September 30, 2011, respectively. Included in the income statement are $49 thousand and $172 thousand of interest income for residential loans held for sale for the three and nine months ended September 30, 2010, respectively. Residential mortgage loans held for sale Old National has elected the fair value option for newly originated conforming fixed-rate and adjustable-rate first mortgage loans held for sale. These loans are intended for sale and are hedged with derivative instruments. Old National has elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification. The fair value option was not elected for loans held for investment. As of September 30 2011, the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected is as follows. Accrued interest at period end is included in the fair value of the instruments.
The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the three and nine months ended September 30, 2011: Changes in Fair Value for the Three Months ended September 30, 2011, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
Changes in Fair Value for the Nine Months ended September 30, 2011, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
As of September 30, 2010, the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was as follows. Accrued interest at period end is included in the fair value of the instruments.
The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the three and nine months ended September 30, 2010: Changes in Fair Value for the Three Months ended September 30, 2010, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option Total Changes
Changes in Fair Value for the Nine Months ended September 30, 2010, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
The carrying amounts and estimated fair values of financial instruments, not previously presented in this note, at September 30, 2011 and December 31, 2010 are as follows:
The following methods and assumptions were used to estimate the fair value of each type of financial instrument. Cash, due from banks, federal funds sold and resell agreements and money market investments: For these instruments, the carrying amounts approximate fair value. Investment securities: Fair values for investment securities held-to-maturity are based on quoted market prices, if available. For securities where quoted prices are not available, fair values are estimated based on market prices of similar securities. Federal Home Loan Bank Stock: Old National Bank is a member of the Federal Home Loan Bank system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of the Federal Home Loan Bank. Loans: The fair value of loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Covered loans: Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting current market rates for new originations of comparable loans adjusted for the risk inherent in the cash flow estimates. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. FDIC indemnification asset: The loss sharing asset was measured separately from the related covered assets as it is not contractually embedded in the assets and is not transferable with the assets should the Bank choose to dispose of the assets. Fair value was estimated using projected cash flows related to the loss sharing agreement based on the expected reimbursements for losses and the applicable loss sharing percentage. These expected reimbursements do not include reimbursable amounts related to future covered expenditures. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. Accrued interest receivable: The carrying amount approximates fair value. Deposits: The fair value of noninterest-bearing demand deposits and savings, NOW and money market deposits is the amount payable as of the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using rates currently offered for deposits with similar remaining maturities. Short-term borrowings: Federal funds purchased and other short-term borrowings generally have an original term to maturity of 30 days or less and, therefore, their carrying amount is a reasonable estimate of fair value. The fair value of securities sold under agreements to repurchase is estimated by discounting future cash flows using current interest rates. Other borrowings: The fair value of medium-term notes, subordinated debt and senior bank notes is determined using market quotes. The fair value of FHLB advances is determined using quoted prices for new FHLB advances with similar risk characteristics. The fair value of other debt is determined using comparable security market prices or dealer quotes. FDIC true-up liability: The purchase and assumption agreement allows the FDIC to recover a portion of the loss share funds previously paid out under the loss sharing agreements in the event losses fail to reach the expected loss estimate ("FDIC True-Up Liability"). The calculation is based on the net present value of expected future cash payments to be made by the Bank to the FDIC at the conclusion of the loss share agreements. The discount rate used was based on current market rates. The expected cash flows were calculated in accordance with the loss share agreements and are based primarily on the expected losses on the covered assets. Standby letters of credit: Fair values for standby letters of credit are based on fees currently charged to enter into similar agreements. The fair value for standby letters of credit was recorded in "Accrued expenses and other liabilities" on the consolidated balance sheet in accordance with FASB ASC 460-10 (FIN 45). Off-balance sheet financial instruments: Fair values for off-balance sheet credit-related financial instruments are based on fees currently charged to enter into similar agreements. For further information regarding the amounts of these financial instruments, see Notes 18 and 19. |
Recent Accounting Pronouncements (Details) | 9 Months Ended |
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Sep. 30, 2011 | |
Recent Accounting Pronouncements | |
Percentage of threshold limit, minimum | 50.00% |
Employee Benefit Plans (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Net Periodic Benefit Cost |
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Financial Guarantees | 9 Months Ended |
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Sep. 30, 2011 | |
Financial Guarantees | |
Financial Guarantees | NOTE 19 - FINANCIAL GUARANTEES Old 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 the Company 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 September 30, 2011, the notional amount of standby letters of credit was $80.6 million, which represents the maximum amount of future funding requirements, and the carrying value was $0.5 million. At December 31, 2010, the notional amount of standby letters of credit was $74.3 million, which represents the maximum amount of future funding requirements, and the carrying value was $0.5 million. During the second quarter of 2007, Old National entered into a risk participation in an interest rate swap. The interest rate swap had a notional amount of $9.0 million at September 30, 2011. |
Fair Value (Carrying Amounts And Estimated Fair Values Of Financial Instruments, Not Previously Presented) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 |
---|---|---|---|
Financial instruments | $ 493,282 | $ 638,210 | $ 753,835 |
Federal Home Loan Bank stock, at cost | 34,870 | 31,937 | 36,090 |
Commercial | 1,246,289 | 1,211,399 | 1,266,893 |
Commercial real estate | 1,128,374 | 942,395 | 981,524 |
Residential real estate | 865,951 | 664,705 | 482,967 |
Consumer credit, net of unearned income | 899,446 | 924,952 | 971,756 |
Covered loans | 711,266 | 0 | 0 |
FDIC indemnification asset | 168,091 | 0 | 0 |
Accrued interest receivable | 43,713 | 42,971 | 44,376 |
Net loans | 4,785,804 | 3,671,142 | 3,630,991 |
Noninterest-bearing demand deposits | 1,728,548 | 1,276,024 | 1,267,404 |
NOW, savings and money market deposits | 1,517,117 | 1,297,443 | 1,163,610 |
Time Deposits | 1,690,723 | 1,475,257 | 1,618,115 |
Standby letters of credit | 80,600 | 74,300 | |
FDIC True-Up Liability | 14,090 | 0 | 0 |
Federal Funds Purchased [Member] | Carrying Value [Member] | Short-Term Borrowings [Member] | |||
Federal Funds Purchased | 948 | 1,663 | |
Subordinated Notes [Member] | Carrying Value [Member] | Other Borrowings [Member] | |||
Subordinated bank notes | 13,000 | ||
Junior Subordinated Debenture [Member] | Carrying Value [Member] | Other Borrowings [Member] | |||
Junior subordinated debenture | 16,000 | 8,000 | |
Repurchase Agreements [Member] | Carrying Value [Member] | Short-Term Borrowings [Member] | |||
Repurchase agreements | 328,720 | 287,414 | |
Repurchase Agreements [Member] | Carrying Value [Member] | Other Borrowings [Member] | |||
Repurchase agreements | 50,000 | 50,000 | |
Other Short-Term Borrowings [Member] | Carrying Value [Member] | Short-Term Borrowings [Member] | |||
Other Short-term Borrowings | 11,336 | 9,155 | |
Federal Home Loan Bank Advances [Member] | Carrying Value [Member] | Other Borrowings [Member] | |||
Federal Home Loan Bank Advances | 211,006 | 211,696 | |
Subordinated Bank Notes [Member] | Carrying Value [Member] | Other Borrowings [Member] | |||
Subordinated bank notes | 150,000 | 150,000 | |
Carrying Value [Member] | |||
Cash, due from banks, federal funds sold and money market investments | 269,229 | 251,552 | |
Federal Home Loan Bank stock, at cost | 34,870 | 31,937 | |
Commercial | 1,376,700 | 1,185,194 | |
Commercial real estate | 1,465,571 | 909,742 | |
Residential real estate | 913,500 | 662,396 | |
Consumer credit, net of unearned income | 1,030,033 | 913,810 | |
FDIC indemnification asset | 168,091 | ||
Accrued interest receivable | 43,713 | 42,971 | |
Noninterest-bearing demand deposits | 1,728,548 | 1,276,024 | |
NOW, savings and money market deposits | 3,447,992 | 2,711,644 | |
Time Deposits | 1,690,723 | 1,475,257 | |
Carrying Value [Member] | U.S. Government-Sponsored Entities And Agencies [Member] | |||
Financial instruments | 177,963 | 303,265 | |
Carrying Value [Member] | Mortgage-Backed Securities - Agency [Member] | |||
Financial instruments | 91,622 | 117,013 | |
Carrying Value [Member] | Commitments To Extend Credit [Member] | |||
Off-Balance Sheet Financial Instruments | 0 | 0 | |
Carrying Value [Member] | States And Political Subdivisions [Member] | |||
Financial instruments | 216,643 | 217,381 | |
Carrying Value [Member] | Other Securities [Member] | |||
Financial instruments | 7,054 | 551 | |
Carrying Value [Member] | Other Borrowings [Member] | Capital Lease Obligations [Member] | |||
Capital Lease Obligations | 4,273 | 4,307 | |
Carrying Value [Member] | Other Borrowings [Member] | Accrued Interest Payable [Member] | |||
Accrued interest payable | 10,366 | 7,860 | |
Carrying Value [Member] | Other Borrowings [Member] | FDIC True-Up Liability [Member] | |||
FDIC True-Up Liability | 14,090 | ||
Carrying Value [Member] | Other Borrowings [Member] | Standby Letters Of Credit [Member] | |||
Standby letters of credit | 508 | 518 | |
Federal Funds Purchased [Member] | Fair Value [Member] | Short-Term Borrowings [Member] | |||
Federal Funds Purchased | 948 | 1,663 | |
Subordinated Notes [Member] | Fair Value [Member] | Other Borrowings [Member] | |||
Subordinated bank notes | 12,999 | ||
Junior Subordinated Debenture [Member] | Fair Value [Member] | Other Borrowings [Member] | |||
Junior subordinated debenture | 12,788 | 7,998 | |
Repurchase Agreements [Member] | Fair Value [Member] | Short-Term Borrowings [Member] | |||
Repurchase agreements | 328,716 | 287,416 | |
Repurchase Agreements [Member] | Fair Value [Member] | Other Borrowings [Member] | |||
Repurchase agreements | 54,848 | 54,104 | |
Other Short-Term Borrowings [Member] | Fair Value [Member] | Short-Term Borrowings [Member] | |||
Other Short-term Borrowings | 11,336 | 9,155 | |
Federal Home Loan Bank Advances [Member] | Fair Value [Member] | Other Borrowings [Member] | |||
Federal Home Loan Bank Advances | 227,938 | 220,531 | |
Subordinated Bank Notes [Member] | Fair Value [Member] | Other Borrowings [Member] | |||
Subordinated bank notes | 150,000 | 154,420 | |
Fair Value [Member] | |||
Cash, due from banks, federal funds sold and money market investments | 269,229 | 251,552 | |
Federal Home Loan Bank stock, at cost | 34,870 | 31,937 | |
Commercial | 1,425,792 | 1,220,464 | |
Commercial real estate | 1,531,385 | 952,885 | |
Residential real estate | 990,779 | 710,865 | |
Consumer credit, net of unearned income | 1,082,806 | 969,263 | |
FDIC indemnification asset | 168,091 | ||
Accrued interest receivable | 43,713 | 42,971 | |
Noninterest-bearing demand deposits | 1,728,548 | 1,276,024 | |
NOW, savings and money market deposits | 3,447,992 | 2,711,644 | |
Time Deposits | 1,734,907 | 1,520,093 | |
Fair Value [Member] | U.S. Government-Sponsored Entities And Agencies [Member] | |||
Financial instruments | 189,617 | 301,809 | |
Fair Value [Member] | Mortgage-Backed Securities - Agency [Member] | |||
Financial instruments | 95,372 | 119,080 | |
Fair Value [Member] | States And Political Subdivisions [Member] | |||
Financial instruments | 225,384 | 204,379 | |
Fair Value [Member] | Other Securities [Member] | |||
Financial instruments | 7,054 | 375 | |
Fair Value [Member] | Other Borrowings [Member] | Capital Lease Obligations [Member] | |||
Capital Lease Obligations | 5,094 | 5,138 | |
Fair Value [Member] | Other Borrowings [Member] | Accrued Interest Payable [Member] | |||
Accrued interest payable | 10,366 | 7,860 | |
Fair Value [Member] | Other Borrowings [Member] | FDIC True-Up Liability [Member] | |||
FDIC True-Up Liability | 14,090 | ||
Fair Value [Member] | Other Borrowings [Member] | Standby Letters Of Credit [Member] | |||
Standby letters of credit | 508 | 518 | |
Fair Value [Member] | Commitments To Extend Credit [Member] | |||
Off-Balance Sheet Financial Instruments | 1,422 | 1,311 | |
Old National Bancorp [Member] | |||
Junior subordinated debenture | $ 13,000 | $ 0 |
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Goodwill And Other Intangible Assets | NOTE 11 - GOODWILL AND OTHER INTANGIBLE ASSETS The following table shows the changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2011 and 2010:
Goodwill is reviewed annually for impairment. Old National completed its most recent annual goodwill impairment test as of August 31, 2011 and determined that no impairment existed as of this date. Old National recorded $68.4 million of goodwill in the first quarter of 2011 associated with the acquisition of Monroe Bancorp, of which $67.5 million was allocated to the "Community Banking" segment and $0.9 million to the "Other" segment. Old National recorded $29.7 million of goodwill in the third quarter of 2011 associated with the acquisition of Integra Bank, all of which was allocated to the "Community Banking" segment. The gross carrying amount and accumulated amortization of other intangible assets at September 30, 2011 and December 31, 2010 was as follows:
Other intangible assets consist of core deposit intangibles and customer relationship intangibles and are being amortized primarily on an accelerated basis over their estimated useful lives, generally over a period of 5 to 25 years. During the first quarter of 2011, Old National recorded $8.2 million of core deposit intangibles associated with the acquisition of Monroe Bancorp, which is included in the "Community Banking" segment. During the first quarter of 2011, Old National also recorded $2.3 million of customer relationship intangibles associated with the trust business of Monroe Bancorp, which is included in the "Other" segment. During the second quarter of 2011, Old National recorded $1.3 million of customer relationship intangibles associated with the trust business of Integra Wealth Management and Trust, which is included in the "Other" segment. During the third quarter of 2011, Old National recorded $4.3 million of core deposit intangibles associated with the acquisition of Integra Bank, which is included in the "Community Banking" segment. Total amortization expense associated with other intangible assets for the nine months ended September 30 was $5.9 million in 2011 and $4.6 million in 2010. Estimated amortization expense for future years is as follows:
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Recent Accounting Pronouncements | 9 Months Ended |
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Sep. 30, 2011 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS FASB ASC 350 – In December 2010, the FASB issued an update (ASU No. 2010-28, When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts) impacting FASB ASC 350-20, Intangibles - Goodwill and Other - Goodwill. The amendments modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For these reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. This update became effective for the Company for interim and annual reporting periods beginning after December 15, 2010 and did not have a material impact on the consolidated financial statements or results of operations. FASB ASC 805 – In December 2010, the FASB issued an update (ASU No. 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations) impacting FASB ASC 805-10, Business Combinations -Overall. The amendments specify that if an entity presents comparative financial statements, the entity should disclose pro forma information, including pro forma revenue and earnings, for the combined entity as though the business combination that occurred in the current year had occurred as of the beginning of the comparable prior annual reporting period. Supplemental pro forma disclosures should include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This update became effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. FASB ASC 310 – In April 2011, the FASB issued an update (ASU No. 2011-02, A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring) impacting FASB ASC 310-40, Troubled Debt Restructurings by Creditors. The amendments specify that in evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following conditions exist: the restructuring constitutes a concession and the debtor is experiencing financial difficulties. The amendments clarify the guidance on these points and give examples of both conditions. This update became effective for the Company for interim or annual reporting periods beginning on or after June 15, 2011 and did not have a material impact on the consolidated financial statements or results of operations. FASB ASC 860 – In April 2011, the FASB issued an update (ASU No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements) impacting FASB ASC 860-10, Transfers and Servicing – Overall. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. This update becomes effective for the Company for interim and annual reporting periods beginning on or after December 15, 2011. The Company is currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact. FASB ASC 820 – In May 2011, the FASB issued an update (ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs) impacting FASB ASC 820, Fair Value Measurement. The amendments in this update will improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards ("IFRSs"). Among the many areas affected by this update are the concept of highest and best use, the fair value of an instrument included in shareholders' equity and disclosures about fair value measurement, especially disclosures about fair value measurements categorized within Level 3 of the fair value hierarchy. This update becomes effective for the Company for interim and annual reporting periods beginning after December 15, 2011. The Company is currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact. FASB ASC 220 – In June 2011, the FASB issued an update (ASU No. 2011-05, Presentation of Comprehensive Income) impacting FASB ASC 220, Comprehensive Income. The amendments in this update eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. An entity will have the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. An entity will be required to present on the face of financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. This update becomes effective for the Company for interim and annual reporting periods beginning after December 15, 2011. The Company is currently evaluating the alternative options for presentation established in the new guidance. FASB ASC 350 – In September 2011, the FASB issued an update (ASU No. 2011-08, Testing Goodwill for Impairment) impacting FASB ASC 350-20, Intangibles – Goodwill and Other. The amendments in this update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If after assessing the totality of events or circumstances, it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If an entity concludes that it is more likely than not that the fair value of the reporting unit is less than the carrying amount, the entity is required to perform the first step of the two-step impairment. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss. This update is effective for the Company for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact. |
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Schedule Of Changes In The Carrying Amount Of Goodwill |
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Schedule Of Gross Carrying Amount And Accumulated Amortization Of Other Intangible Assets |
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Schedule Of Estimated Amortization Expense For Future Years |
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Finance Receivables And Allowance For Credit Losses | NOTE 8 – FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES Old National's finance receivables consist primarily of loans made to consumers and commercial clients in various industries including manufacturing, agribusiness, transportation, mining, wholesaling and retailing. Most of Old National's lending activity occurs within the Company's principal geographic markets of Indiana, Illinois and Kentucky. Old National has no concentration of commercial loans in any single industry exceeding 10% of its portfolio. The composition of loans by lending classification was as follows:
(1) Includes direct finance leases of $87.0 million at September 30, 2011 and $106.1 million at December 31, 2010. The risk characteristics of each loan portfolio segment are as follows: Commercial Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.Commercial real estate These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing Old National's commercial real estate portfolio are diverse in terms of type and geographic location. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. As a general rule, Old National avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Construction Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners. Construction loans are generally based on estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from Old National until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Residential and Consumer With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, Old National establishes a maximum loan-to-value ratio and generally requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in residential property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. Portfolio loans, or loans Old National intends to hold for investment purposes, are carried at the principal balance outstanding, net of earned interest, purchase premiums or discounts, deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the principal balances of loans outstanding. Allowance for loan losses The allowance for loan losses is maintained at a level believed adequate by management to absorb probable losses incurred in the loan portfolio. Management's evaluation of the adequacy of the allowance is an estimate based on reviews of individual loans, pools of homogeneous loans, historical loss experience, and assessments of the impact of current economic conditions on the portfolio. The allowance is increased through a provision charged to operating expense. Loans deemed to be uncollectible are charged to the allowance. Recoveries of loans previously charged-off are added to the allowance. Old National's activity in the allowance for loan losses for the three months ended September 30, 2011 and 2010, excluding covered loans, is as follows:
Old National's activity in the allowance for loan losses for the nine months ended September 30, 2011 and 2010, excluding covered loans, is as follows:
The following table provides Old National's recorded investment in financing receivables, excluding covered loans, by portfolio segment at September 30, 2011 and December 31, 2010 and other information regarding the allowance:
(1) Includes $166.4 million of revolving credits not accounted for under ASC 310-30.
Old National's management monitors the credit quality of its financing receivables in an on-going manner. Internally, management assigns a credit quality grade to each non-homogeneous commercial and commercial real estate loan in the portfolio. The primary determinants of the credit quality grade are based upon the reliability of the primary source of repayment and the past, present, and projected financial condition of the borrower. The credit quality rating also reflects current economic and industry conditions. Major factors used in determining the grade can vary based on the nature of the loan, but commonly include factors such as debt service coverage, internal cash flow, liquidity, leverage, operating performance, debt burden, FICO scores, occupancy, interest rate sensitivity, and expense burden. Old National uses the following definitions for risk ratings: Criticized. Special mention loans that have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date. Classified – Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Classified – Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Pass rated loans are those loans that are other than criticized, classified – substandard or classified – doubtful. The risk category of loans, excluding covered loans, by class of loans is as follows:
Old National considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, Old National also evaluates credit quality based on the aging status of the loan and by payment activity. The following table presents the recorded investment in residential and consumer loans based on payment activity as of September 30, 2011 and December 31, 2010, excluding covered loans:
Large commercial credits are subject to individual evaluation for impairment. Retail credits and other small balance credits that are part of a homogeneous group are not tested for individual impairment. A loan is considered impaired when it is probable that contractual interest and principal payments will not be collected either for the amounts or by the dates as scheduled in the loan agreement. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated cash flows using the loan's existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Old National's policy for recognizing income on impaired loans is to accrue interest unless a loan is placed on nonaccrual status. For the nine months ended September 30, 2011 and 2010, the average balance of impaired loans was $66.4 million and $50.1 million, respectively, for which no interest income was recorded. No additional funds are committed to be advanced in connection with these impaired loans. The following table shows Old National's impaired loans, excluding covered loans, that are individually evaluated as of September 30, 2011 and December 31, 2010. Of the loans purchased without FDIC loss share coverage, only those that have experienced subsequent impairment since the date acquired are included in the table below. Purchased loans of $6.3 million migrated to classified-doubtful during the third quarter of 2011.
The average balance of impaired loans, excluding covered loans, and interest income recognized on impaired loans during the three months ended September 30, 2011 are included in the tables below.
(1) The Company does not record interest on nonaccrual loans The average balance of impaired loans, excluding covered loans, and interest income recognized on impaired loans during the nine months ended September 30, 2011 are included in the tables below.
(1) The Company does not record interest on nonaccrual loans until principal is recovered. A loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectibility of principal or interest. Interest accrued during the current year on such loans is reversed against earnings. Interest accrued in the prior year, if any, is charged to the allowance for loan losses. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for six months and future payments are reasonably assured. Old National's past due financing receivables as of September 30, 2011 and December 31, 2010 are as follows:
In the course of resolving nonperforming loans, Old National may choose to restructure the contractual terms of certain loans. The Company may attempt to work out an alternative payment schedule with the borrower in order to avoid foreclosure actions. Any loans that are modified are reviewed by Old National to identify if a troubled debt restructuring ("TDR") has occurred, which is when for economic or legal reasons related to a borrower's financial difficulties, the Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and could include reduction of the stated interest rate other than normal market rate adjustments, extension of maturity dates, or reduction of principal balance or accrued interest. The decision to restructure a loan, versus aggressively enforcing the collection of the loan, may benefit Old National by increasing the ultimate probability of collection. Loans modified in a troubled debt restructuring are placed on nonaccrual status until the Company determines the future collection of principal and interest is reasonably assured, which generally requires that the borrower demonstrate a period of performance according to the restructured terms of six months. At September 30, 2011, loans modified in a troubled debt restructuring, which are included in nonaccrual loans, totaled $9.4 million, consisting of $3.9 million of commercial loans and $5.5 million of commercial real estate loans, and had specific allocations of allowance for loan losses of $2.4 million. At December 31, 2010, loans modified in a troubled debt restructuring, which are included in nonaccrual loans, totaled $4.8 million, consisting of $3.8 million of commercial loans and $1.0 million of commercial real estate loans, and had specific allocations of allowance for loan losses of $1.6 million. If the Company is unable to resolve a nonperforming loan issue the credit will be charged off when it is apparent there will be a loss. For large commercial type loans, each relationship is individually analyzed for evidence of apparent loss based on quantitative benchmarks or subjectively based upon certain events or particular circumstances. It is Old National's policy to charge off small commercial loans scored through our small business credit center with contractual balances under $250,000 that have been placed on nonaccrual status or became ninety days or more delinquent, without regard to the collateral position. For residential and consumer loans, a charge off is recorded at the time foreclosure is initiated or when the loan becomes 120 to 180 days past due. Old National has loan participations, which qualify as participating interests, with other financial institutions. At September 30, 2011, these loans totaled $217.9 million, of which $126.6 million had been sold to other financial institutions and $91.3 million was retained by Old National. The loan participations convey proportionate ownership rights with equal priority to each participating interest holder, involve no recourse (other than ordinary representations and warranties) to, or subordination by, any participating interest holder, all cash flows are divided among the participating interest holders in proportion to each holder's share of ownership and no holder has the right to pledge the entire financial asset unless all participating interest holders agree. Purchased Impaired Loans (non-covered loans) Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan and lease losses. In determining the estimated fair value of purchased loans, management considers a number of factors including the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, net present value of cash flows expected to be received, among others. Purchased loans are accounted for in accordance with guidance for certain loans acquired in a transfer, when the loans have evidence of credit deterioration since origination and it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in a provision for loan and lease losses. Subsequent increases in cash flows will result in a reversal of the provision for loan losses to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. Old National has purchased loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. Of these acquired credit impaired loans, $166.4 million in carrying balances did not meet the criteria to be accounted for under the guidance of ASC 310-30 as they were revolving lines of credit, thus these lines have not been included in the following table. For the loans that meet the criteria of ASC 310-30 treatment, the carrying amount is as follows:
The accretable difference on purchased loans acquired in a business combination is the difference between the expected cash flows and the net present value of expected cash flows with such difference accreted into earnings using the effective yield method over the term of the loans. The accretable difference that is expected to be accreted into future earnings of the Company totaled $25.5 million at the date of acquisition. Accretion of $10.0 million has been recorded as loan interest income through September 30, 2011. Accretable yield, or income expected to be collected, is as follows:
Included in Old National's allowance for loan losses is $1.2 million related to the purchased loans disclosed above for the first nine months of 2011. An immaterial amount of allowances for loan losses were reversed during the first nine months of 2011 related to these loans. Purchased loans for which it was probable at acquisition that all contractually required payments would not be collected are as follows:
Income is not recognized on certain purchased loans if Old National cannot reasonably estimate cash flows to be collected. Old National had no purchased loans for which it could not reasonably estimate cash flows to be collected. |
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Financing Activities | NOTE 13 - FINANCING ACTIVITIES The following table summarizes Old National's and its subsidiaries' other borrowings at September 30, 2011 and December 31, 2010:
Contractual maturities of other borrowings at September 30, 2011, were as follows:
INTEGRA BANK ACQUISITION On July 29, 2011, Old National acquired the banking operations of Integra Bank N.A. ("Integra") in an FDIC assisted transaction. As of the acquisition date, there were $107.1 million of Federal Home Loan Bank advances and $85.8 million of structured repurchase agreements recorded at estimated fair value. All of the Federal Home Loan Bank advances and repurchase agreement were repaid during August 2011 and September 2011. FEDERAL HOME LOAN BANK Federal Home Loan Bank advances had weighted-average rates of 3.30% and 3.32% at September 30, 2011, and December 31, 2010, respectively. These borrowings are collateralized by investment securities and residential real estate loans up to 153% of outstanding debt. SUBORDINATED NOTES In 2011, Old National acquired Monroe Bancorp. Included in the acquisition was $13 million of 10% subordinated notes. As shown in the table above, these subordinated notes mature June 2019. Old National may redeem the notes, in whole or in part, beginning June 30, 2012. According to capital guidelines, the portion of limited-life capital instruments that is includible in Tier 2 capital is limited within five years or less until maturity. As of September 30, 2011, $13 million of the subordinated notes qualified as Tier 2 Capital for regulatory purposes. SUBORDINATED BANK NOTES Old National Bank's notes are issued under the global note program and are not obligations of, or guaranteed by, Old National Bancorp. According to capital guidelines, the portion of limited-life capital instruments that is includible in Tier 2 capital is limited within five years or less until maturity. As of September 30, 2011, none of the subordinated bank notes qualified as Tier 2 Capital for regulatory purposes. As shown in the table above, these subordinated bank notes mature October 2011. Capital treatment ceased October 2010, or one year prior to the maturity date. Subsequent to quarter-end, the subordinated debt was paid in full. JUNIOR SUBORDINATED DEBENTURES Junior subordinated debentures related to trust preferred securities are classified in "other borrowings". These securities qualify as Tier 1 capital for regulatory purposes, subject to certain limitations. ONB Capital Trust II issued $100 million in preferred securities in April 2002. Old National guaranteed the payment of distributions on the trust preferred securities issued by ONB Capital Trust II. The preferred securities had a liquidation amount of $25 per share with a cumulative annual distribution rate of 8.0% or $2.00 per share payable quarterly and maturing on April 15, 2032. Proceeds from the issuance of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by ONB Capital Trust II. On November 9, 2010, Old National's Board of Directors approved the redemption of the junior subordinated debentures. As a result of the redemption of the debentures, the trustee of ONB Capital Trust II redeemed all $100 million of the 8% trust preferred securities on December 15, 2010. The $3.0 million remaining balance of the unamortized issuance costs at the time of the redemption were expensed. In 2007, Old National acquired St. Joseph Capital Trust I and St. Joseph Capital Trust II in conjunction with its acquisition of St. Joseph Capital Corporation. Old National guarantees the payment of distributions on the trust preferred securities issued by St. Joseph Capital Trust I and St. Joseph Capital Trust II. St. Joseph Capital Trust I issued $3.0 million in preferred securities in July 2003. The preferred securities carry a variable rate of interest priced at the three-month LIBOR plus 305 basis points, payable quarterly and maturing on July 11, 2033. Proceeds from the issuance of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by St. Joseph Capital Trust I. St. Joseph Capital Trust II issued $5.0 million in preferred securities in March 2005. The preferred securities had a cumulative annual distribution rate of 6.27% until March 2010 and now carry a variable rate of interest priced at the three-month LIBOR plus 175 basis points, payable quarterly and maturing on March 17, 2035. Proceeds from the issuance of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by St. Joseph Capital Trust II. Old National, at any time, may redeem the junior subordinated debentures and thereby cause a redemption of the trust preferred securities. In 2011, Old National acquired Monroe Bancorp Capital Trust I and Monroe Bancorp Statutory Trust II in conjunction with its acquisition of Monroe Bancorp. Old National guarantees the payment of distributions on the trust preferred securities issued by Monroe Bancorp Capital Trust I and Monroe Bancorp Statutory Trust II. Monroe Bancorp Capital Trust I issued $3.0 million in preferred securities in July 2006. The preferred securities carry a fixed rate of interest of 7.15% until October 7, 2011 and thereafter a variable rate of interest priced at the three-month LIBOR plus 1.60%. Proceeds from the issuance of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by Monroe Bancorp Capital Trust I. Monroe Bancorp Statutory Trust II issued $5.0 million in preferred securities in March 2007. The preferred securities carry a fixed rate of interest of 6.52% until June 15, 2012 and thereafter a variable rate of interest priced at the three-month LIBOR plus 1.60%. Proceeds from the issuance of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by Monroe Bancorp Statutory Trust II. Old National, at any time, may redeem the junior subordinated debentures and thereby cause a redemption of the trust preferred securities in whole (or in part from time to time) on or after October 7, 2011 (for debentures owned by Monroe Bancorp Capital Trust I) and on or after June 15, 2012 (for debentures owned by Monroe Bancorp Statutory Trust II), and in whole or in part following the occurrence and continuance of certain adverse federal income tax or capital treatment events. CAPITAL LEASE OBLIGATION On January 1, 2004, Old National entered into a long-term capital lease obligation for a branch office building in Owensboro, Kentucky, which extends for 25 years with one renewal option for 10 years. The economic substance of this lease is that Old National is financing the acquisition of the building through the lease and accordingly, the building is recorded as an asset and the lease is recorded as a liability. The fair value of the capital lease obligation was estimated using a discounted cash flow analysis based on Old National's current incremental borrowing rate for similar types of borrowing arrangements. At September 30, 2011, the future minimum lease payments under the capital lease were as follows:
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Covered Loans (Schedule Of Accretable Yield Or Income Expected To Be Collected) (Details) (USD $) In Thousands | 9 Months Ended |
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Sep. 30, 2011 | |
Beginning, Balance | $ 0 |
New loans purchased | 25,520 |
Accretion of income | (10,006) |
Reclassifications from (to) nonaccretable difference | 18,851 |
Disposals/other adjustments | (134) |
Ending, Balance | 34,231 |
Covered Loans [Member] | |
Beginning, Balance | 0 |
New loans purchased | 260,665 |
Accretion of income | (7,749) |
Reclassifications from (to) nonaccretable difference | 0 |
Disposals/other adjustments | 36 |
Ending, Balance | $ 252,952 |
Covered Loans | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Covered Loans | NOTE 9 – COVERED LOANS Covered loans represent loans acquired from the FDIC that are subject to loss share agreements. Covered loans were $711.3 million at September 30, 2011. The composition of covered loans by lending classification was as follows:
Loans were recorded at fair value in accordance with FASB ASC 805, Business Combinations. No allowance for loan losses related to the acquired loans is recorded on the acquisition date as the fair value of the loans acquired incorporates assumptions regarding credit risk. Loans acquired are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC 820, exclusive of the loss share agreements with the Federal Deposit Insurance Corporation ("FDIC"). The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows. Over the life of the acquired loans, the Company continues to estimate cash flows expected to be collected on individual loans or on pools of loans sharing common risk characteristics and were treated in the aggregate when applying various valuation techniques. The Company evaluates at each balance sheet date whether the present value of its loans determined using the effective interest rates has decreased and if so, recognizes a provision for loan losses. For any increases in cash flows expected to be collected, the Company adjusts the amount of accretable yield recognized on a prospective basis over the loan's or pool's remaining life. Accretable yield, or income expected to be collected, is as follows:
Because the FDIC will reimburse the Company for losses incurred on certain acquired loans, an indemnification asset (FDIC loss share receivable) is recorded at fair value at the acquisition date. The indemnification asset is recognized at the same time as the indemnified loans, and measured on the same basis, subject to collectibility or contractual limitations. The loss share agreements on the acquisition date reflect the reimbursements expected to be received from the FDIC, using an appropriate discount rate, which reflects counterparty credit risk and other uncertainties. The fair value of the indemnification asset at September 30, 2011 was $168.1 million. The loss share agreements continue to be measured on the same basis as the related indemnified loans. Because the acquired loans are subject to the accounting prescribed by FASB ASC 310, subsequent changes to the basis of the loss share agreements also follow that model. Deterioration in the credit quality of the loans (recorded as an adjustment to the allowance for loan losses) would immediately increase the basis of the loss share agreements, with the offset recorded through the consolidated statement of income. Increases in the credit quality or cash flows of loans (reflected as an adjustment to yield and accreted into income over the remaining life of the loans) decrease the basis of the loss share agreements, with the decrease being accreted into income over the same period or the life of the loss share agreements, whichever is shorter. Loss assumptions used in the basis of the indemnified loans are consistent with the loss assumptions used to measure the indemnification asset. Fair value accounting incorporates into the fair value of the indemnification asset an element of the time value of money, which is accreted back into income over the life of the loss share agreements. Upon determination of an incurred loss the indemnification asset will be reduced by the amount owed by the FDIC. A corresponding receivable is recorded until cash is received from the FDIC. |
Segment Information (Narrative) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Net interest income | $ 72,592 | $ 54,168 | $ 196,278 | $ 164,439 |
Noninterest expense | 95,158 | 76,102 | 254,841 | 231,033 |
Income before income taxes | 24,842 | 13,645 | 68,736 | 37,670 |
Community Banking [Member] | ||||
Net interest income | 75,292 | 63,402 | 218,356 | 187,215 |
Noninterest expense | 60,828 | 57,298 | 192,071 | 176,081 |
Income before income taxes | 44,522 | 21,823 | 102,013 | 53,773 |
Community Banking [Member] | Monroe Bancorp And Integra Bank [Member] | ||||
Net interest income | 21,000 | 38,700 | ||
Monroe Bancorp And Integra Bank [Member] | ||||
Noninterest expense | 16,000 | 31,000 | ||
Income before income taxes | $ 10,600 | $ 15,000 |
Fair Value (Reconciliation Of All Assets Measured At Fair Value On A Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Fair Value | ||
Beginning balance | $ 8,400 | $ 12,398 |
Accretion/(amortization) of discount or premium | (49) | (86) |
Payments received | (5) | (10) |
Credit loss write-downs | 0 | (311) |
Increase/(decrease) in fair value of securities | (816) | (3,575) |
Ending balance | $ 7,530 | $ 8,416 |
Income Taxes (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Income Taxes | ||||
Reversal of portion of unrecognized tax benefits | $ (623,000) | $ (652,000) | $ (623,000) | $ (652,000) |
Unrecognized tax benefit liability includes interest | 210,000 | |||
Unrecognized tax benefits resulting in net operating loss carryforward | 350,000 | 350,000 | ||
Valuation allowance | $ 0 | $ 0 |
Employee Benefit Plans (Narrative) (Details) (USD $) In Thousands, unless otherwise specified | Sep. 30, 2011 |
---|---|
Employee Benefit Plans | |
Retirement benefits based on years of service and compensation | 5 |
Expected contribution to retirement plan | $ 220 |
Benefit payments from restoration plan | 125 |
Additional contribution to cover benefit payments | $ 30 |
Finance Receivables And Allowance For Credit Losses (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Finance Receivables And Allowance For Credit Losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Composition Of Loans |
(1) Includes direct finance leases of $87.0 million at September 30, 2011 and $106.1 million at December 31, 2010. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Activity In The Allowance For Loan Losses | Old National's activity in the allowance for loan losses for the three months ended September 30, 2011 and 2010, excluding covered loans, is as follows:
Old National's activity in the allowance for loan losses for the nine months ended September 30, 2011 and 2010, excluding covered loans, is as follows:
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Schedule Of Recorded Investment In Financing Receivables |
(1) Includes $166.4 million of revolving credits not accounted for under ASC 310-30.
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Schedule Of Risk Category Of Loans |
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Schedule Of Recorded Investment On Payment Activity |
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Schedule Of Impaired Loans That Are Individually Evaluated |
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Schedule Of Average Balance And Interest Income Recognized On Impaired Loans | The average balance of impaired loans, excluding covered loans, and interest income recognized on impaired loans during the three months ended September 30, 2011 are included in the tables below.
(1) The Company does not record interest on nonaccrual loans The average balance of impaired loans, excluding covered loans, and interest income recognized on impaired loans during the nine months ended September 30, 2011 are included in the tables below.
(1) The Company does not record interest on nonaccrual loans until principal is recovered. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Past Due Financing Receivables |
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Schedule Of Activity Of Purchased Impaired Loans |
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Schedule Of Accretable Difference On Purchased Loans |
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Schedule Of Payments Receivable Of Loans Purchased |
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Loans Held For Sale | 9 Months Ended |
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Loans Held For Sale | |
Loans Held For Sale | NOTE 7 - LOANS HELD FOR SALE Residential loans that Old National has committed to sell are recorded at fair value in accordance with FASB ASC 825-10 (SFAS No. 159 – The Fair Value Option for Financial Assets and Financial Liabilities). At September 30, 2011 and December 31, 2010, Old National had residential loans held for sale of $4.7 million and $3.8 million, respectively. During the first nine months of 2011, commercial and commercial real estate loans held for investment of $4.7 million, including $0.1 million of purchased impaired loans, were reclassified to loans held for sale at the lower of cost or fair value and sold for $4.9 million, resulting in income of $0.2 million. At September 30, 2011, there were no loans held for sale under this arrangement. During the first nine months of 2010, commercial and commercial real estate loans held for investment of $3.2 million were reclassified to loans held for sale at the lower of cost or fair value and sold for $3.4 million, resulting in a recovery of $0.2 million on the loans transferred. At September 30, 2010, there were no loans held for sale under this arrangement. |
Financing Activities (Contractual Maturities Of Other Borrowings) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 |
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Financing Activities | |||
Due in 2011 | $ 150,012 | ||
Due in 2012 | 688 | ||
Due in 2013 | 75,649 | ||
Due in 2014 | 92,560 | ||
Due in 2015 | 16,763 | ||
Thereafter | 108,607 | ||
SFAS 133 fair value hedge and other basis adjustments | (395) | ||
Total | $ 443,884 | $ 421,911 | $ 578,282 |
Acquisition And Divestiture Activity | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Acquisition And Divestiture Activity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition And Divestiture Activity | NOTE 3 – ACQUISITION AND DIVESTITURE ACTIVITY Acquisitions Integra Bank N.A. On July 29, 2011, Old National acquired the banking operations of Integra Bank N.A. ("Integra") in an FDIC assisted transaction. As part of the purchase and assumption agreement, the Company and the FDIC entered into loss sharing agreements (each, a "loss sharing agreement" and collectively, the "loss sharing agreements"), whereby the FDIC will cover a substantial portion of any future losses on loans (and related unfunded commitments), other real estate owned ("OREO") and certain accrued interest on loans for up to 90 days. The acquired loans and OREO subject to the loss sharing agreements are referred to collectively as "covered assets." Under the terms of the loss sharing agreements, the FDIC will reimburse Old National for 80% of losses up to $275.0 million, losses in excess of $275.0 million up to $467.2 million at 0% reimbursement, and 80% of losses in excess of $467.2 million. Old National will reimburse the FDIC for its share of recoveries with respect to losses for which the FDIC has reimbursed the Bank under the loss sharing agreements. The loss sharing provisions of the agreements for commercial and single family residential mortgage loans are in effect for five and ten years, respectively, from the July 29, 2011 acquisition date and the loss recovery provisions for such loans are in effect for eight years and ten years, respectively, from the acquisition date. Integra was a full service community bank headquartered in Evansville, Indiana that operated 52 branch locations. We entered into this transaction due to the attractiveness in the pricing of the acquired loan portfolio, including the indemnification assets, and the attractiveness of immediate low cost core deposits. We also believed there were opportunities to enhance income and improve efficiencies. We believe participating with the FDIC in this assisted transaction was advantageous to the Company. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the July 29, 2011 acquisition date. The application of the acquisition method of accounting resulted in the recognition of $29.7 million of goodwill and $4.3 million of core deposit intangible. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired and is influenced significantly by the FDIC-assisted transaction process. Goodwill of $29.0 million is deductible for income tax purposes. Due primarily to the significant amount of fair value adjustments and the FDIC loss sharing agreements put in place, historical results for Integra are not meaningful to the Company's results and thus no pro forma information is presented. A summary, at fair value, of the assets acquired and liabilities assumed in the Integra transaction, as of the acquisition date, is as follows:
Trust Business of Integra Bank On June 1, 2011, Old National Bancorp's wholly owned trust subsidiary, American National Trust and Investment Management Company d/b/a Old National Trust Company ("ONTC"), acquired the trust business of Integra Bank, N.A. in a transaction unrelated to the previously noted FDIC transaction. As of the closing, the trust business had approximately $328 million in assets under management. This transaction brings the total assets under management by Old National's Wealth Management division to approximately $4.4 billion. Old National paid Integra $1.3 million in an all cash transaction and anticipates acquisition-related costs will approximate $150 thousand. Old National recorded $1.3 million of customer relationship intangible assets which will be amortized on an accelerated basis over 12 years and is included in the "Other" segment, as described in Note 20 of the consolidated financial statement footnotes. Monroe Bancorp On January 1, 2011, Old National acquired 100 % of Monroe Bancorp ("Monroe") in an all stock transaction. Monroe was headquartered in Bloomington, Indiana and had 15 banking centers. The acquisition increases Old National's market position to number 1 in Bloomington and strengthens its position as the third largest branch network in Indiana. Pursuant to the merger agreement, the shareholders of Monroe received approximately 7.6 million shares of Old National Bancorp stock valued at approximately $90.1 million. Under the acquisition method of accounting, the total estimated purchase price is allocated to Monroe's net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on management's preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the purchase price for the Monroe acquisition is allocated as follows (in thousands):
Prior to the end of the one year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively. Of the total estimated purchase price, an estimate of $11.2 million has been allocated to net tangible assets acquired and $10.5 million has been allocated to definite-lived intangible assets acquired. The remaining purchase price has been allocated to goodwill. The goodwill will not be deductible for tax purposes and is included in the "Community Banking" and "Other" segments, as described in Note 20 of these consolidated financial statement footnotes. The components of the estimated fair value of the acquired identifiable intangible assets are in the table below. These intangible assets will be amortized on an accelerated basis over their estimated lives and are included in the "Community Banking" and "Other" segments, as described in Note 20 of these consolidated financial statement footnotes.
Divestiture On October 13, 2011, Old National announced the signing of an agreement to sell the deposits of four former Integra Bank branches located in the Chicago area to First Midwest Bank. As such, these deposits are considered held for sale as of September 30, 2011. The deposits totaled approximately $185.0 million. First Midwest Bank has agreed to pay Old National 50 basis points, or approximately $0.5 million, on the transaction deposits at these four locations. Old National will retain all of the loans. The transaction is expected to close around December 3, 2011. |
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Derivative Financial Instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Fair Value Of Derivative Financial Instruments |
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Schedule Of Effect Of Derivative Instruments On The Consolidated Statement Of Income |
(1) Amounts represent the net interest payments as stated in the contractual agreements. (2) Amounts represent ineffectiveness on derivatives designated as fair value hedges. (3) Includes the valuation differences between the customer and offsetting counterparty swaps. See Note 21 to the consolidated financial statements. |
Investment Securities (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investment Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost And Fair Value Of Available-For-Sale And Held-To-Maturity Investment Securities Portfolio |
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Expected Maturities Of Investment Securities Portfolio |
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Investment Securities With Unrealized Losses By Aggregated Major Security Type And Length Of Time In A Continuous Unrealized Loss Position |
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Pooled Trust Preferred Securities |
(1) Lowest rating for the security provided by any nationally recognized credit rating agency. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities With Other-Than-Temporary Impairment | (1) Lowest rating for the security provided by any nationally recognized credit rating agency.
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Securities With Other-Than-Temporary Impairment, Cumulative Other-Than-Temporary Impairment | (1) Lowest rating for the security provided by any nationally recognized credit rating agency. (2) Sold during fourth quarter 2010. (3) Sold during first quarter 2011.
| (1) Lowest rating for the security provided by any nationally recognized credit rating agency.
|
Derivative Financial Instruments (Schedule Of Effect Of Derivative Instruments On The Consolidated Statement Of Income) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||||
Interest Rate Contracts [Member] | Interest Income / (Expense) [Member] | Derivatives In Fair Value Hedging Relationships [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 744 | [1] | $ 843 | [1] | $ 2,205 | [1] | $ 2,750 | [1] | ||||||
Interest Rate Contracts [Member] | Interest Income / (Expense) [Member] | Derivatives In Cash Flow Hedging Relationships [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | 410 | [1] | 383 | [1] | 1,197 | [1] | 1,158 | [1] | ||||||
Interest Rate Contracts [Member] | Other Income / (Expense) [Member] | Derivatives In Fair Value Hedging Relationships [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | 345 | [2] | 238 | [2] | 714 | [2] | 1,555 | [2] | ||||||
Interest Rate Contracts [Member] | Other Income / (Expense) [Member] | Derivatives Not Designated As Hedging Instruments [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | (196) | [3] | 132 | [3] | (12) | [3] | (169) | [3] | ||||||
Mortgage Contracts [Member] | Mortgage Banking Revenue [Member] | Derivatives Not Designated As Hedging Instruments [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | (47) | 131 | (68) | (93) | ||||||||||
Derivatives In Fair Value Hedging Relationships [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | 1,089 | 1,081 | 2,919 | 4,305 | ||||||||||
Derivatives In Cash Flow Hedging Relationships [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | 410 | 383 | 1,197 | 1,158 | ||||||||||
Derivatives Not Designated As Hedging Instruments [Member] | ||||||||||||||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ (243) | $ 263 | $ (80) | $ (262) | ||||||||||
|
Loans Held For Sale (Details) (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |
Residential loans held for sale, at fair value | $ 4,710,000 | $ 3,512,000 | $ 3,819,000 |
Proceeds from sale of loans | 4,743,000 | 3,377,000 | |
Commercial And Commercial Real Estate [Member] | |||
Proceeds from sale of loans | 4,900,000 | 3,400,000 | |
Income from sale of loan | 200,000 | ||
Commercial and commercial real estate loans held for investment | 4,700,000 | 3,200,000 | |
Purchased impaired loans | 100,000 | ||
Recoveries | $ 200,000 |
Finance Receivables And Allowance For Credit Losses (Schedule Of Composition Of Loans) (Details) (USD $) In Thousands | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Jun. 30, 2011 | Sep. 30, 2010 | Jun. 30, 2010 | Dec. 31, 2009 | |||||
Total Loans | $ 4,851,326 | $ 3,743,451 | ||||||||
Allowance for loan losses | (65,219) | (72,309) | (72,149) | |||||||
Net loans | 4,785,804 | 3,671,142 | 3,630,991 | |||||||
Direct finance leases | 87,000 | 106,100 | ||||||||
Commercial [Member] | ||||||||||
Allowance for loan losses | (23,868) | (26,204) | (26,029) | (26,909) | (28,559) | (26,869) | ||||
Direct finance leases | 1,246,289 | [1] | 1,211,399 | [1] | ||||||
Commercial Real Estate - Construction [Member] | ||||||||||
Direct finance leases | 50,116 | 101,016 | ||||||||
Commercial Real Estate - Other [Member] | ||||||||||
Direct finance leases | 1,078,258 | 841,379 | ||||||||
Residential Real Estate [Member] | ||||||||||
Direct finance leases | 865,951 | 664,705 | ||||||||
Heloc [Member] | ||||||||||
Direct finance leases | 245,686 | 248,293 | ||||||||
Auto [Member] | ||||||||||
Direct finance leases | 487,983 | 497,102 | ||||||||
Other [Member] | ||||||||||
Direct finance leases | 165,777 | 179,557 | ||||||||
Covered Loans [Member] | ||||||||||
Direct finance leases | $ 711,266 | $ 0 | ||||||||
|
Investment Securities (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Jun. 30, 2011 | Sep. 30, 2010 | Jun. 30, 2010 | Dec. 31, 2010 | |
Proceeds from sales and calls of securities available for sale | $ 763,500,000 | $ 882,000,000 | |||||
Gains on sales of securities available for sale | 6,000,000 | 13,100,000 | |||||
Losses on sales of securities available for sale | 1,000,000 | 300,000 | |||||
Gains associated with trading securities | 1,000 | ||||||
Securities - available-for-sale, at fair value | 2,253,089,000 | 2,190,804,000 | 2,253,089,000 | 2,190,804,000 | 1,960,222,000 | ||
Amount of other-than-temporary impairment recognized in earnings | 140,000 | 39,000 | 1,872,000 | 4,441,000 | |||
Trading securities | 2,794,000 | 0 | 2,794,000 | 0 | 0 | ||
Number of securities in security portfolio | 1,060 | 1,060 | |||||
Number of securities in unrealized loss position | 64 | 64 | |||||
Net unrealized losses | 26,406,000 | 26,406,000 | 34,866,000 | ||||
Number of securities rated | 3 | 2 | 3 | 2 | |||
Credit losses recorded | 500,000 | 300,000 | |||||
Fair value of trust preferred securities | 1,100,000 | 1,100,000 | |||||
Collateralized Mortgage Obligations [Member] | Mortgage-Backed Securities - Non-Agency Group 1 [Member] | Non-Agency [Member] | |||||||
Securities - available-for-sale, at fair value | 95,100,000 | 95,100,000 | |||||
Collateralized Mortgage Obligations [Member] | Non-Agency [Member] | |||||||
Number of non-agency collateralized mortgage obligations | 14 | 14 | |||||
Net unrealized losses | 3,500,000 | 3,500,000 | |||||
Number of securities rated | 10 | 10 | |||||
Remaining fair value of non-agency mortgage backed securities | 78,500,000 | 78,500,000 | |||||
Investment Grade Range B- To CC [Member] | |||||||
Number of securities rated | 9 | 9 | |||||
Investment Grade Rated B [Member] | |||||||
Number of securities rated | 1 | 1 | |||||
Fair value | 14,300,000 | 14,300,000 | |||||
Investment Grade Rated B- [Member] | |||||||
Number of securities rated | 3 | 3 | |||||
Investment Grade Rated CCC [Member] | |||||||
Fair value | 27,800,000 | 27,800,000 | |||||
Investment Grade Rated CC [Member] | |||||||
Number of securities rated | 5 | 5 | |||||
Fair value | 36,400,000 | 36,400,000 | |||||
Investment Grade Rated BB [Member] | |||||||
Number of securities rated | 1 | 1 | |||||
Investment Grade Rated C [Member] | |||||||
Number of securities rated | 4 | 4 | |||||
Investment Grade Rated D [Member] | |||||||
Number of securities rated | 2 | 2 | |||||
Mortgage-Backed Securities - Agency [Member] | Non-Agency [Member] | |||||||
Fair value | 97,700,000 | 97,700,000 | |||||
Credit losses recorded | 3,000,000 | ||||||
Mortgage-Backed Securities - Non-Agency Group 1 [Member] | |||||||
Securities - available-for-sale, at fair value | 126,806,000 | ||||||
Number of securities with other-than-temporary impairment charges related to credit loss | 3 | 10 | 3 | 10 | |||
Amount of other-than-temporary impairment recognized in earnings | 0 | 39,000 | 499,000 | 2,997,000 | |||
Net unrealized losses | 8,380,000 | ||||||
Pooled Trust Preferred Securities Group 1 [Member] | |||||||
Securities - available-for-sale, at fair value | 7,530,000 | 7,530,000 | 7,530,000 | 8,400,000 | |||
Number of securities with other-than-temporary impairment charges related to credit loss | 2 | 2 | |||||
Amount of other-than-temporary impairment recognized in earnings | 0 | 311,000 | |||||
Net unrealized losses | 19,816,000 | 19,816,000 | 18,968,000 | ||||
Number of securities rated | 9 | 9 | |||||
Fair value of trust preferred securities | 7,500,000 | 7,500,000 | |||||
Pooled Trust Preferred Securities And Non-Agency Mortgage Backed Securities [Member] | |||||||
Amount of other-than-temporary impairment recognized in earnings | 3,300,000 | ||||||
FASB ASC 325-10 (EITF 99-20) [Member] | |||||||
Net unrealized losses | 8,300,000 | 8,300,000 | |||||
Number of securities rated | 7 | 7 | |||||
Fair value of trust preferred securities | 4,800,000 | 4,800,000 | |||||
Other-than-temporary-impairment losses on securities | 0 | ||||||
Trust Preferred Securities Which Are Not Subject To FASB ASC 325-10 [Member] | |||||||
Net unrealized losses | 11,500,000 | 10,500,000 | 11,500,000 | 10,500,000 | |||
Number of securities rated | 2 | 2 | |||||
Fair value of trust preferred securities | 2,700,000 | 3,600,000 | 2,700,000 | 3,600,000 | |||
Other-than-temporary-impairment losses on securities | 0 | 0 | |||||
Former Directors And Executives Of Monroe Bancorp [Member] | |||||||
Trading securities | $ 2,800,000 | $ 2,800,000 |
Finance Receivables And Allowance For Credit Losses (Schedule Of Recorded Investment On Payment Activity) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Residential [Member] | Performing [Member] | ||
Financing Receivable Recorded Investment | $ 856,717 | $ 655,986 |
Performing [Member] | Consumer, Heloc [Member] | ||
Financing Receivable Recorded Investment | 244,458 | 246,390 |
Performing [Member] | Consumer, Auto [Member] | ||
Financing Receivable Recorded Investment | 485,834 | 494,771 |
Performing [Member] | Consumer, Other [Member] | ||
Financing Receivable Recorded Investment | 164,052 | 177,470 |
Residential [Member] | Nonperforming [Member] | ||
Financing Receivable Recorded Investment | 9,234 | 8,719 |
Nonperforming [Member] | Consumer, Heloc [Member] | ||
Financing Receivable Recorded Investment | 1,228 | 1,903 |
Nonperforming [Member] | Consumer, Auto [Member] | ||
Financing Receivable Recorded Investment | 2,149 | 2,331 |
Nonperforming [Member] | Consumer, Other [Member] | ||
Financing Receivable Recorded Investment | 1,725 | 2,087 |
Consumer, Heloc [Member] | ||
Financing Receivable Recorded Investment | 245,686 | 248,293 |
Consumer, Auto [Member] | ||
Financing Receivable Recorded Investment | 487,983 | 497,102 |
Consumer, Other [Member] | ||
Financing Receivable Recorded Investment | 165,777 | 179,557 |
Residential [Member] | ||
Financing Receivable Recorded Investment | $ 865,951 | $ 664,705 |
Net Income Per Share | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | NOTE 4 - NET INCOME PER SHARE The following table reconciles basic and diluted net income per share for the three and nine months ended September 30:
(1) 2 and 0 shares of restricted stock and restricted stock units were not included in the computation of net income per diluted share for the third quarter ended September 30, 2011 and 2010, respectively, because the effect would be antidilutive. 5 and 70 shares of restricted stock and restricted stock units were not included in the computation of net income per diluted share for the nine months ended September 30, 2011 and 2010, respectively, because the effect would be antidilutive. (2) Options to purchase 4,626 shares and 6,001 shares outstanding at September 30, 2011 and 2010, respectively, were not included in the computation of net income per diluted share for the third quarter ended September 30, 2011 and 2010, respectively, because the exercise price of these options was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. Options to purchase 4,605 and 6,001 shares outstanding at September 30, 2011 and 2010, respectively, were not included in the computation of net income per diluted share for the nine months ended September 30, 2011 and 2010, respectively, because the exercise price of these options was greater than the average market price of the common shares and, therefore, the effect would be antidilutive.
|
Goodwill And Other Intangible Assets (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Jun. 30, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Mar. 31, 2011
Monroe Bancorp [Member] | Sep. 30, 2011
Integra Bank [Member] | Mar. 31, 2011
Community Banking [Member] | Mar. 31, 2011
Other Segment [Member] | |
Goodwill impairment | $ 0 | |||||||||||
Goodwill | 265,985,000 | 167,884,000 | 265,985,000 | 167,884,000 | 167,884,000 | 167,884,000 | 68,400,000 | 29,700,000 | 67,500,000 | 900,000 | ||
Other intangible assets estimated useful life, Minimum (in years) | 5 | |||||||||||
Other intangible assets estimated useful life, Maximum (in years) | 25 | |||||||||||
Core deposit intangibles | 4,300,000 | 4,300,000 | 8,200,000 | |||||||||
Customer relationship intangibles | 1,300,000 | 2,300,000 | ||||||||||
Amortization expense of other intangible assets | $ 2,106,000 | $ 1,501,000 | $ 5,868,000 | $ 4,627,000 |
Fair Value (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis |
There were no significant transfers into or out of Level 1, Level 2 or Level 3 assets or liabilities during the nine months ended September 30, 2011.
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Reconciliation Of All Assets Measured At Fair Value On A Recurring Basis Using Significant Unobservable Inputs (Level 3) |
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Assets Measured At Fair Value On A Non-Recurring Basis |
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Schedule Of Difference Between The Aggregate Fair Value And The Aggregate Remaining Principal Balance |
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Changes In Fair Value For Items Measured At Fair Value Pursuant To Election Of The Fair Value | Changes in Fair Value for the Three Months ended September 30, 2011, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
Changes in Fair Value for the Nine Months ended September 30, 2011, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
Changes in Fair Value for the Three Months ended September 30, 2010, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option Total Changes
Changes in Fair Value for the Nine Months ended September 30, 2010, for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
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Carrying Amounts And Estimated Fair Values Of Financial Instruments, Not Previously Presented |
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Acquisition And Divestiture Activity (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition And Divestiture Activity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of The Assets Acquired And Liabilities Assumed At Fair Value |
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Schedule Of Preliminary Purchase Price Allocation |
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Schedule Of Components Of Estimated Fair Value Of Intangible Assets |
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Finance Receivables And Allowance For Credit Losses (Schedule Of Average Balance And Interest Income Recognized On Impaired Loans) (Details) (USD $) In Thousands | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011
Commercial [Member] | Sep. 30, 2011
Commercial [Member] | Sep. 30, 2011
Commercial [Member]
Impaired Financing Receivable With No Related Allowance [Member] | Sep. 30, 2011
Commercial [Member]
Impaired Financing Receivable With No Related Allowance [Member] | Sep. 30, 2011
Commercial [Member]
Impaired Financing Receivable With Related Allowance [Member] | Sep. 30, 2011
Commercial [Member]
Impaired Financing Receivable With Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Construction [Member]
Impaired Financing Receivable With No Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Construction [Member]
Impaired Financing Receivable With No Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Construction [Member]
Impaired Financing Receivable With Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Construction [Member]
Impaired Financing Receivable With Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Other [Member]
Impaired Financing Receivable With No Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Other [Member]
Impaired Financing Receivable With No Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Other [Member]
Impaired Financing Receivable With Related Allowance [Member] | Sep. 30, 2011
Commercial Real Estate - Other [Member]
Impaired Financing Receivable With Related Allowance [Member] | |||||||||||||||||
Average Recorded Investment | $ 66,400 | $ 50,100 | $ 77,851 | $ 66,429 | $ 12,081 | $ 11,833 | $ 22,118 | $ 17,103 | $ 0 | $ 0 | $ 0 | $ 0 | $ 11,409 | $ 10,713 | $ 32,243 | $ 26,780 | ||||||||||||||||
Interest Income Recognized | $ 495 | [1] | $ 910 | [1] | $ 178 | [1] | $ 268 | [1] | $ 59 | [1] | $ 145 | [1] | $ 0 | [1] | $ 0 | [1] | $ 0 | [1] | $ 0 | [1] | $ 64 | [1] | $ 169 | [1] | $ 194 | [1] | $ 328 | [1] | ||||
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Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2010 | May 31, 2008 | Sep. 30, 2011
Restricted Stock Awards [Member] | Sep. 30, 2010
Restricted Stock Awards [Member] | Sep. 30, 2011
Restricted Stock Units [Member] | Sep. 30, 2010
Restricted Stock Units [Member] | Sep. 30, 2011
Stock Options [Member] | Sep. 30, 2010
Stock Options [Member] | Jan. 31, 2011
Old National Bancorp [Member] | Jan. 31, 2011
Monroe Bancorp [Member] | |
Shares authorized under incentive compensation plan | 1,000,000 | |||||||||||
Shares available for issuance | 2,500,000 | |||||||||||
Stock based compensation expense | $ 2,551,000 | $ 1,702,000 | $ 61,000 | $ 119,000 | ||||||||
Options for shares converted on acquisition | 300,000 | |||||||||||
Options for shares received on acquisition | 300,000 | |||||||||||
Restricted stock awards granted | 121,000 | |||||||||||
Unrecognized compensation expense | 1,700,000 | |||||||||||
Restricted stock expense | 700,000 | 600,000 | 800,000 | 300,000 | ||||||||
Reversal of expense related to performance based restricted stock grants | $ 100,000 | $ 100,000 | $ 13,000 | $ 200,000 | ||||||||
Restricted stock units granted | 159,000 | |||||||||||
Restricted stock issued | 10,000 |
Fair Value (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |
Fair Value | |||||
Amortization of premiums on securities included in interest income | $ 49,000 | $ 86,000 | |||
Credit losses | 311,000 | ||||
Principal amount of impaired commercial and commercial real estate loans | 55,400,000 | 55,400,000 | 36,400,000 | ||
Valuation allowance | 16,300,000 | 16,300,000 | 13,600,000 | ||
Provision for loan losses expensed | 10,300,000 | 7,100,000 | |||
Interest and fee income, loans, commercial and residential, real estate | $ 41,000 | $ 49,000 | $ 141,000 | $ 172,000 | |
Past due of mortgage loans held for sale, days | 90 | 90 |
Goodwill And Other Intangible Assets (Schedule Of Gross Carrying Amount And Accumulated Amortization Of Other Intangible Assets) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Gross Carrying Amount | $ 72,910 | $ 56,976 |
Accumulated Amortization and Impairment | (36,612) | (30,798) |
Net Carrying Amount | 36,298 | 26,178 |
Core Deposit [Member] | ||
Gross Carrying Amount | 39,265 | 26,810 |
Accumulated Amortization and Impairment | (18,539) | (14,646) |
Net Carrying Amount | 20,726 | 12,164 |
Customer Business Relationships [Member] | ||
Gross Carrying Amount | 25,611 | 25,753 |
Accumulated Amortization and Impairment | (15,867) | (14,581) |
Net Carrying Amount | 9,744 | 11,172 |
Customer Trust Relationships [Member] | ||
Gross Carrying Amount | 3,621 | |
Accumulated Amortization and Impairment | (334) | |
Net Carrying Amount | 3,287 | |
Customer Loan Relationships [Member] | ||
Gross Carrying Amount | 4,413 | 4,413 |
Accumulated Amortization and Impairment | (1,872) | (1,571) |
Net Carrying Amount | $ 2,541 | $ 2,842 |
Covered Loans (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||
Covered Loans | |||||||||||||||||||||||||||||||||||||||||
Composition Of Covered Loans By Lending Classification |
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Schedule Of Accretable Yield Or Income Expected To Be Collected |
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Segment Information (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Information | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Financial Information Concerning Segments |
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Comprehensive Income (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Amounts Recognized In Other Comprehensive Income (Loss) |
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Schedule Of Accumulated Other Comprehensive Income (Loss) |
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Short-Term Borrowings | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Borrowings | NOTE 12 – SHORT-TERM BORROWINGS The following table presents the distribution of Old National's short-term borrowings and related weighted-average interest rates as of September 30, 2011:
Other Short-term Borrowings As of September 30, 2011, Old National had $10.9 million of Treasury funds under the Treasury Tax and Loan Account program. These funds typically have a short duration, are collateralized and can be withdrawn by the Treasury Department at any time. At September 30, 2011, the effective interest rate on these funds was 0%. The remaining $0.4 million of short-term borrowings is a note payable to a life insurance company which was assumed as part of the Integra Bank acquisition. This note payable, which carries an effective interest rate of 7.26%, will mature in January 2012. |
Investment Securities (Securities With Other-Than-Temporary Impairment) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | Dec. 31, 2009 | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
BAFC Ser 4 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
BAFC Ser 4 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWALT Ser 73CB 1 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWALT Ser 73CB 1 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWALT Ser 73CB 2 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWALT Ser 73CB 2 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWHL 2006-10 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWHL 2006-10 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWHL 2005-20 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
CWHL 2005-20 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
FHASI Ser 4 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
FHASI Ser 4 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
FHASI Ser 4 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
FHASI Ser 4 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
HALO Ser 1R [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
HALO Ser 1R [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI Ser S9 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI Ser S9 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI Ser S10 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI Ser S10 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI Ser S10 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI Ser S10 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RALI QS2 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RALI QS2 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI S1 [Member] | Sep. 30, 2010
Mortgage-Backed Securities - Non-Agency Group 1 [Member]
RFMSI S1 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
BAFC Ser 4 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
BAFC Ser 4 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
BAFC Ser 4 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWALT Ser 73CB 1 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWALT Ser 73CB 1 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWALT Ser 73CB 1 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWALT Ser 73CB 2 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWALT Ser 73CB 2 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWALT Ser 73CB 2 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWHL 2006-10 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWHL 2006-10 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWHL 2006-10 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWHL 2005-20 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWHL 2005-20 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
CWHL 2005-20 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
FHASI Ser 4 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
FHASI Ser 4 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
FHASI Ser 4 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
HALO Ser 1R [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
HALO Ser 1R [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
HALO Ser 1R [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI Ser S9 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI Ser S9 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI Ser S9 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI Ser S10 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI Ser S10 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI Ser S10 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RALI QS2 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RALI QS2 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RALI QS2 [Member] | Sep. 30, 2011
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI S1 [Member] | Dec. 31, 2010
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI S1 [Member] | Dec. 31, 2009
Mortgage-Backed Securities - Non-Agency Group 2 [Member]
RFMSI S1 [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member] | Jun. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member] | Dec. 31, 2010
Pooled Trust Preferred Securities Group 1 [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member]
MM Community Funding IX [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member]
MM Community Funding IX [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
MM Community Funding IX [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member]
TROPC [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member]
TROPC [Member] | Sep. 30, 2011
MM Community Funding IX [Member]
Pooled Trust Preferred Securities Group 2 [Member] | Dec. 31, 2010
MM Community Funding IX [Member]
Pooled Trust Preferred Securities Group 2 [Member] | Dec. 31, 2009
MM Community Funding IX [Member]
Pooled Trust Preferred Securities Group 2 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 2 [Member] | Dec. 31, 2010
Pooled Trust Preferred Securities Group 2 [Member] | Dec. 31, 2009
Pooled Trust Preferred Securities Group 2 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 2 [Member]
TROPC [Member] | Dec. 31, 2010
Pooled Trust Preferred Securities Group 2 [Member]
TROPC [Member] | Dec. 31, 2009
Pooled Trust Preferred Securities Group 2 [Member]
TROPC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vintage | 2007 | 2005 | 2005 | 2006 | 2005 | 2007 | 2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | 2007 | 2005 | 2005 | 2006 | [1] | 2005 | 2007 | 2006 | 2006 | [2] | 2006 | 2006 | [2] | 2006 | 2003 | 2003 | 2003 | 2003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lowest Credit Rating | CCC | [3] | CCC | [3] | CCC | [3] | CCC | [3] | CCC | [3] | CCC | [3] | C | [3] | C | [3] | B- | [3] | B- | [3] | CC | [3] | CCC | [3] | CC | [3] | CCC | [3] | B | [3] | B | [3] | CC | [3] | CC | [3] | CC | [3] | CC | [3] | CC | [3] | CC | [3] | C | [3] | C | [3] | CCC | [3] | CCC | [3] | CCC | [3] | CC | [3] | CC | [3] | CC | [3] | CC | [3] | B | [3] | CC | [3] | CCC | [3] | C | [3] | C | [3] | D | [3] | C | [3] | C | [3] | D | [3] | C | [3] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | $ 2,205,285 | $ 2,205,285 | $ 1,953,842 | $ 39,860 | $ 117,058 | $ 39,860 | $ 117,058 | $ 134,168 | $ 14,026 | $ 14,026 | $ 6,606 | $ 6,606 | $ 6,923 | $ 6,923 | $ 10,030 | $ 10,030 | $ 9,734 | $ 9,734 | $ 20,003 | $ 21,617 | $ 20,003 | $ 21,617 | $ 15,640 | $ 15,640 | $ 32,070 | $ 32,070 | $ 4,217 | $ 4,360 | $ 4,217 | $ 4,360 | $ 6,565 | $ 6,565 | $ 5,127 | $ 5,127 | $ 70,653 | $ 70,653 | $ 14,026 | $ 3,842 | $ 4,791 | $ 5,332 | $ 20,003 | $ 15,640 | $ 4,217 | $ 2,802 | $ 3,390 | $ 3,390 | $ 27,346 | $ 27,346 | $ 27,368 | $ 2,107 | $ 2,107 | $ 2,076 | $ 1,283 | $ 1,283 | $ 2,076 | $ 12,139 | $ 977 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of other-than-temporary impairment recognized in earnings | 140 | 39 | 1,872 | 4,441 | 0 | 39 | 499 | 2,997 | 0 | 79 | 0 | 207 | 0 | 427 | 0 | 309 | 0 | 39 | 0 | 37 | 340 | 629 | 0 | 16 | 0 | 923 | 0 | 2 | 143 | 76 | 0 | 278 | 0 | 30 | 499 | 2,997 | 4,429 | 0 | 79 | 63 | 0 | 207 | 83 | 0 | 427 | 182 | 0 | [1] | 309 | [1] | 762 | [1] | 0 | 39 | 72 | 340 | 629 | 223 | 16 | 0 | 0 | 0 | [2] | 923 | [2] | 1,880 | [2] | 143 | 76 | 249 | 0 | [2] | 278 | [2] | 739 | [2] | 0 | 30 | 176 | 0 | 311 | 0 | 165 | 0 | 146 | 0 | 165 | 2,612 | 0 | 930 | 20,366 | 0 | 444 | 3,517 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other-than-temporary-impairment recognized in earnings | $ 0 | $ 39 | $ 499 | $ 3,308 | $ 3,927 | $ 24,795 | $ 0 | $ 499 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Financing Activities (Narrative) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Jan. 01, 2004 | Sep. 30, 2011
Monroe Bancorp [Member]
Subordinated Notes [Member] | Sep. 30, 2011
Subordinated Notes [Member] | Dec. 15, 2010
ONB Capital Trust II [Member] | Sep. 30, 2011
ONB Capital Trust II [Member] | Apr. 30, 2002
ONB Capital Trust II [Member] | Oct. 07, 2011
Monroe Bancorp Capital Trust I [Member] | Jul. 31, 2006
Monroe Bancorp Capital Trust I [Member] | Jun. 15, 2012
Monroe Bancorp Statutory Trust II [Member] | Mar. 31, 2007
Monroe Bancorp Statutory Trust II [Member] | Sep. 30, 2011
St. Joseph Capital Trust I [Member] | Jul. 31, 2003
St. Joseph Capital Trust I [Member] | Sep. 30, 2011
St. Joseph Capital Trust II [Member] | Mar. 31, 2010
St. Joseph Capital Trust II [Member] | Mar. 31, 2005
St. Joseph Capital Trust II [Member] | Sep. 30, 2011
Integra Bank [Member] | Jul. 29, 2011
Integra Bank [Member] | |
Federal Home Loan Bank advances | $ 107,100,000 | ||||||||||||||||||
Structured repurchase agreements recorded at estimated fair value | 85,800,000 | ||||||||||||||||||
Weighted-average rates of Federal Home Loan Bank Advances | 3.30% | 3.32% | |||||||||||||||||
Percentage of borrowings collateralized by investment securities and residential real estate loans | 153.00% | ||||||||||||||||||
Subordinated notes | 13,000,000 | ||||||||||||||||||
Percentage, acquisition of subordinated notes | 10.00% | ||||||||||||||||||
Portion of subordinated notes qualified as Tier 2 capital | 13,000,000 | ||||||||||||||||||
Preferred securities | 100,000,000 | 3,000,000 | 5,000,000 | 3,000,000 | 5,000,000 | ||||||||||||||
Liquidation amount of preferred securities, per share | $ 25 | ||||||||||||||||||
Cumulative annual distribution rate of preferred securities | 8.00% | 6.27% | |||||||||||||||||
Cumulative annual distribution rate of preferred securities per share | $ 2.00 | ||||||||||||||||||
Maturing date of preferred securities | Dec. 15, 2010 | Mar. 17, 2035 | |||||||||||||||||
Redemption of trust preferred securities | 100,000,000 | ||||||||||||||||||
Date of redemption | Dec. 15, 2010 | Mar. 17, 2035 | |||||||||||||||||
Expensed unamortized issuance costs | $ 3,000,000 | ||||||||||||||||||
Fixed rate of interest of preferred securities | 7.15% | 6.52% | |||||||||||||||||
Long-term capital lease obligation period, in years | 25 | ||||||||||||||||||
Long-term capital lease obligation renewal period, in years | 10 | ||||||||||||||||||
Maturity date | Jun. 01, 2019 | Apr. 15, 2032 | Jul. 11, 2033 | Jan. 01, 2012 |
Other Real Estate Owned (Narrative) (Details) (OREO [Member], USD $) In Millions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Real Estate Properties [Line Items] | |
Loss sharing agreements amount, 80% on assets acquired | $ 275.0 |
80% reimbursement for loss on acquisition | 467.2 |
Minimum [Member] | |
Real Estate Properties [Line Items] | |
Zero percent for losses on acquisition | 275.0 |
Maximum [Member] | |
Real Estate Properties [Line Items] | |
Zero percent for losses on acquisition | $ 467.2 |
Income Taxes (Summary Of Reconciliation Of Unrecognized Tax Benefits) (Details) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Income Taxes | ||
Beginning Balance at January 1 | $ 4,553 | $ 8,500 |
Additions (reductions) based on tax positions related to the current year | 4 | (3,348) |
Reductions due to statute of limitations expiring | (413) | (601) |
Ending Balance at September 30 | $ 4,144 | $ 4,551 |
Finance Receivables And Allowance For Credit Losses (Schedule Of Activity In The Allowance For Loan Losses) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Sep. 30, 2011
Commercial [Member] | Sep. 30, 2010
Commercial [Member] | Sep. 30, 2011
Commercial [Member] | Sep. 30, 2010
Commercial [Member] | Sep. 30, 2011
Commercial Real Estate [Member] | Sep. 30, 2010
Commercial Real Estate [Member] | Sep. 30, 2011
Commercial Real Estate [Member] | Sep. 30, 2010
Commercial Real Estate [Member] | Sep. 30, 2011
Consumer [Member] | Sep. 30, 2010
Consumer [Member] | Sep. 30, 2011
Consumer [Member] | Sep. 30, 2010
Consumer [Member] | Sep. 30, 2011
Residential [Member] | Sep. 30, 2010
Residential [Member] | Sep. 30, 2011
Residential [Member] | Sep. 30, 2010
Residential [Member] | Sep. 30, 2011
Unallocated [Member] | Sep. 30, 2010
Unallocated [Member] | Sep. 30, 2011
Unallocated [Member] | Sep. 30, 2010
Unallocated [Member] | Sep. 30, 2011
Total Loans And Leases Receivable Allowance [Member] | Sep. 30, 2010
Total Loans And Leases Receivable Allowance [Member] | Sep. 30, 2011
Total Loans And Leases Receivable Allowance [Member] | Sep. 30, 2010
Total Loans And Leases Receivable Allowance [Member] | |
Beginning balance | $ 65,219 | $ 72,309 | $ 72,149 | $ 26,029 | $ 28,559 | $ 26,204 | $ 26,869 | $ 32,490 | $ 27,267 | $ 32,654 | $ 27,138 | $ 8,558 | $ 12,877 | $ 11,142 | $ 13,853 | $ 3,112 | $ 3,160 | $ 2,309 | $ 1,688 | $ 0 | $ 0 | $ 0 | $ 0 | $ 70,189 | $ 71,863 | $ 72,309 | $ 69,548 |
Charge-offs | (2,175) | (797) | (7,344) | (8,788) | (2,834) | (2,708) | (5,815) | (7,549) | (2,161) | (4,435) | (8,014) | (12,646) | (367) | (248) | (1,540) | (1,924) | 0 | 0 | 0 | 0 | (7,537) | (8,188) | (22,713) | (30,907) | |||
Recoveries | 878 | 79 | 3,013 | 3,537 | 305 | 444 | 1,289 | 1,589 | 1,400 | 1,541 | 4,726 | 4,634 | 66 | 10 | 158 | 67 | 0 | 0 | 0 | 0 | 2,649 | 2,074 | 9,186 | 9,827 | |||
Provision | (864) | (932) | 1,995 | 5,291 | 315 | 4,423 | 2,148 | 8,248 | 130 | 2,983 | 73 | 7,125 | 337 | (74) | 2,221 | 3,017 | 0 | 0 | 0 | 0 | (82) | 6,400 | 6,437 | 23,681 | |||
Ending Balance | $ 65,219 | $ 72,309 | $ 72,149 | $ 23,868 | $ 26,909 | $ 23,868 | $ 26,909 | $ 30,276 | $ 29,426 | $ 30,276 | $ 29,426 | $ 7,927 | $ 12,966 | $ 7,927 | $ 12,966 | $ 3,148 | $ 2,848 | $ 3,148 | $ 2,848 | $ 0 | $ 0 | $ 0 | $ 0 | $ 65,219 | $ 72,149 | $ 65,219 | $ 72,149 |
Fair Value (Schedule Of Difference Between The Aggregate Fair Value And The Aggregate Remaining Principal Balance) (Details) (Residential Loans Held For Sale [Member], USD $) In Thousands | Sep. 30, 2011 | Sep. 30, 2010 |
---|---|---|
Residential Loans Held For Sale [Member] | ||
Aggregate Fair Value | $ 4,710 | $ 3,512 |
Difference | 158 | 81 |
Contractual Principal | $ 4,552 | $ 3,431 |
Comprehensive Income | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | NOTE 5 – COMPREHENSIVE INCOME Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available-for-sale and unrealized gains and losses on cash flow hedges and changes in funded status of pension plans which are also recognized as separate components of equity. Following is a summary of other comprehensive income for the three and nine months ended September 30, 2011 and 2010:
The following tables summarize the changes within each classification of accumulated other comprehensive income ("AOCI") for the nine months ended September 30, 2011 and 2010:
|
Employee Benefit Plans (Net Periodic Benefit Cost) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Employee Benefit Plans | ||||
Interest cost | $ 525 | $ 498 | $ 1,575 | $ 1,492 |
Expected return on plan assets | (676) | (490) | (2,028) | (1,470) |
Recognized actuarial loss | 689 | 401 | 2,067 | 1,203 |
Settlement | 465 | 350 | 1,069 | 350 |
Net periodic benefit cost | $ 1,003 | $ 759 | $ 2,683 | $ 1,575 |
Stock-Based Compensation | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Stock-Based Compensation | |
Stock-Based Compensation |
NOTE 15 - STOCK-BASED COMPENSATION During May 2008, shareholders approved the Company's 2008 Incentive Compensation Plan which authorizes up to a maximum of 1.0 million shares plus certain shares covered under the 1999 Equity Incentive Plan. At September 30, 2011, 2.5 million shares remained available for issuance. The granting of awards to key employees is typically in the form of restricted stock or options to purchase common shares of stock. Stock Options The Company did not grant any stock options during the first nine months of 2011. Old National recorded $61 thousand of stock based compensation expense, net of tax, during the first nine months of 2011 as compared to $119 thousand for the first nine months of 2010. In connection with the acquisition of Monroe Bancorp on January 1, 2011, 0.3 million options for shares of Monroe Bancorp stock were converted to 0.3 million options for shares of Old National Bancorp stock. Old National recorded no incremental expense associated with the conversion of these options. Restricted Stock Awards The Company granted 121 thousand time-based restricted stock awards to certain key officers during 2011, with shares vesting in either eighteen or thirty-six month periods. Compensation expense is recognized on a straight-line basis over the vesting period. Shares are subject to certain restrictions and risk of forfeiture by the participants. As of September 30, 2011, unrecognized compensation expense was estimated to be $1.7 million for unvested restricted share awards. Old National recorded expense of $0.7 million, net of tax benefit, during the first nine months of 2011, compared to expense of $0.6 million during the first nine months of 2010 related to the vesting of restricted share awards. Included in the first nine months of 2010 is the reversal of $0.1 million of expense associated with certain performance-based restricted stock grants. During the third quarter of 2011, the Company modified the vesting eligibility of 10 thousand shares of restricted stock issued to an employee. As a result of that modification, the Company reversed $0.1 million for the quarter ended September 30, 2011. There were no restricted stock modifications during 2010. Restricted Stock Units The Company granted 159 thousand shares of performance based restricted stock units to certain key officers during 2011, with shares vesting at the end of a thirty-six month period based on the achievement of certain targets. Compensation expense is recognized on a straight-line basis over the vesting period. Shares are subject to certain restrictions and risk of forfeiture by the participants. In addition, certain of the restricted stock units are subject to relative performance factors which could increase or decrease the percentage of shares issued. Old National recorded $0.8 million of stock based compensation expense, net of tax, during the first nine months of 2011. Old National recorded $0.3 million of stock based compensation expense, net of tax, during the first nine months of 2010. Included in the first nine months of 2011 is the reversal of $13 thousand of expense associated with certain performance-based restricted stock grants. Included in the first nine months of 2010 is the reversal of $0.2 million of expense associated with certain performance-based restricted stock grants. |
Finance Receivables And Allowance For Credit Losses (Schedule Of Impaired Loans That Are Individually Evaluated) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Recorded Investment | $ 73,001 | |
Related Allowance | 1,188 | 1,600 |
Commercial [Member] | ||
Recorded Investment | 17,165 | 14,721 |
Commercial [Member] | Impaired Financing Receivable With No Related Allowance [Member] | ||
Recorded Investment | 15,409 | 6,116 |
Unpaid Principal Balance | 20,699 | 8,001 |
Related Allowance | 0 | 0 |
Commercial [Member] | Impaired Financing Receivable With Related Allowance [Member] | ||
Recorded Investment | 18,887 | 17,828 |
Unpaid Principal Balance | 19,817 | 20,341 |
Related Allowance | 8,803 | 6,063 |
Commercial Real Estate - Construction [Member] | Impaired Financing Receivable With No Related Allowance [Member] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Commercial Real Estate - Construction [Member] | Impaired Financing Receivable With Related Allowance [Member] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Commercial Real Estate - Other [Member] | Impaired Financing Receivable With No Related Allowance [Member] | ||
Recorded Investment | 13,033 | 10,554 |
Unpaid Principal Balance | 19,621 | 16,781 |
Related Allowance | 0 | 0 |
Commercial Real Estate - Other [Member] | Impaired Financing Receivable With Related Allowance [Member] | ||
Recorded Investment | 34,365 | 18,823 |
Unpaid Principal Balance | 37,743 | 19,849 |
Related Allowance | 7,233 | 8,514 |
Impaired Financing Receivable With Related Allowance [Member] | ||
Recorded Investment | 81,694 | 53,321 |
Unpaid Principal Balance | 97,880 | 64,972 |
Related Allowance | $ 16,036 | $ 14,577 |
Finance Receivables And Allowance For Credit Losses (Schedule Of Risk Category Of Loans) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Commercial [Member] | Grade, Pass [Member] | ||
Risk category of loans | $ 1,110,329 | $ 1,105,382 |
Commercial Real Estate - Construction [Member] | Grade, Pass [Member] | ||
Risk category of loans | 18,233 | 77,241 |
Commercial Real Estate - Other [Member] | Grade, Pass [Member] | ||
Risk category of loans | 936,709 | 729,243 |
Commercial [Member] | Grade, Criticized [Member] | ||
Risk category of loans | 45,244 | 38,629 |
Commercial Real Estate - Construction [Member] | Grade, Criticized [Member] | ||
Risk category of loans | 13,998 | 16,223 |
Commercial Real Estate - Other [Member] | Grade, Criticized [Member] | ||
Risk category of loans | 39,274 | 29,161 |
Commercial [Member] | Grade, Classified - Substandard [Member] | ||
Risk category of loans | 52,978 | 41,899 |
Commercial Real Estate - Construction [Member] | Grade, Classified - Substandard [Member] | ||
Risk category of loans | 11,653 | 7,552 |
Commercial Real Estate - Other [Member] | Grade, Classified - Substandard [Member] | ||
Risk category of loans | 35,790 | 52,559 |
Commercial [Member] | Grade, Classified - Doubtful [Member] | ||
Risk category of loans | 37,738 | 25,489 |
Commercial Real Estate - Construction [Member] | Grade, Classified - Doubtful [Member] | ||
Risk category of loans | 6,232 | 0 |
Commercial Real Estate - Other [Member] | Grade, Classified - Doubtful [Member] | ||
Risk category of loans | 66,485 | 30,416 |
Commercial [Member] | ||
Risk category of loans | 1,246,289 | 1,211,399 |
Commercial Real Estate - Construction [Member] | ||
Risk category of loans | 50,116 | 101,016 |
Commercial Real Estate - Other [Member] | ||
Risk category of loans | $ 1,078,258 | $ 841,379 |
Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Differences In Taxes From Continuing Operations |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Reconciliation Of Unrecognized Tax Benefits |
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Finance Receivables And Allowance For Credit Losses (Schedule Of Payments Receivable Of Loans Purchased) (Details) (USD $) In Thousands | Sep. 30, 2011 |
---|---|
Contractually required payments receivable of loans purchased during the year | $ 116,528 |
Cash flows expected to be collected at acquisition | 108,567 |
Fair value of acquired loans at acquisition | 95,330 |
Commercial [Member] | |
Contractually required payments receivable of loans purchased during the year | 8,131 |
Commercial Real Estate [Member] | |
Contractually required payments receivable of loans purchased during the year | 50,481 |
Consumer [Member] | |
Contractually required payments receivable of loans purchased during the year | 57,009 |
Residential [Member] | |
Contractually required payments receivable of loans purchased during the year | $ 907 |
Net Income Per Share (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Table Reconciling Basic And Diluted Net Income Per Share |
(1) 2 and 0 shares of restricted stock and restricted stock units were not included in the computation of net income per diluted share for the third quarter ended September 30, 2011 and 2010, respectively, because the effect would be antidilutive. 5 and 70 shares of restricted stock and restricted stock units were not included in the computation of net income per diluted share for the nine months ended September 30, 2011 and 2010, respectively, because the effect would be antidilutive. (2) Options to purchase 4,626 shares and 6,001 shares outstanding at September 30, 2011 and 2010, respectively, were not included in the computation of net income per diluted share for the third quarter ended September 30, 2011 and 2010, respectively, because the exercise price of these options was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. Options to purchase 4,605 and 6,001 shares outstanding at September 30, 2011 and 2010, respectively, were not included in the computation of net income per diluted share for the nine months ended September 30, 2011 and 2010, respectively, because the exercise price of these options was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. |
Consolidated Statements Of Changes In Shareholders' Equity (USD $) In Thousands | Common Stock [Member] | Capital Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Comprehensive Income [Member] | Total | ||
---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2009 | $ 87,182 | $ 746,775 | $ 30,235 | $ (20,366) | $ 843,826 | |||
Comprehensive income | ||||||||
Net income | 0 | 0 | 32,488 | 0 | 32,488 | 32,488 | ||
Other comprehensive income | ||||||||
Change in unrealized gain (loss) on securities available for sale, net of reclassification and tax | [1] | 0 | 0 | 0 | 29,295 | 29,295 | 29,295 | |
Transferred securities, net of tax | [1] | 0 | 0 | 0 | 5,110 | 5,110 | 5,110 | |
Reclassification adjustment on cash flows hedges, net of tax | [1] | 0 | 0 | 0 | 845 | 845 | 845 | |
Net loss, settlement cost and amortization of net (gain) loss on defined benefit pension plans, net of tax | [1] | 0 | 0 | 0 | 932 | 932 | 932 | |
Total comprehensive income | [1] | 68,670 | ||||||
Dividends - common stock | 0 | 0 | (18,268) | 0 | (18,268) | |||
Common stock issued | 13 | 123 | 0 | 0 | 136 | |||
Common stock repurchased | (41) | (442) | 0 | 0 | (483) | |||
Stock based compensation expense | 0 | 1,702 | 0 | 0 | 1,702 | |||
Stock activity under incentive comp plans | 18 | 134 | (51) | 0 | 101 | |||
Balance at Sep. 30, 2010 | 87,172 | 748,292 | 44,404 | 15,816 | 895,684 | |||
Balance at Dec. 31, 2010 | 87,183 | 748,873 | 44,018 | (1,269) | 878,805 | |||
Comprehensive income | ||||||||
Net income | 0 | 0 | 50,246 | 0 | 50,246 | 50,246 | ||
Other comprehensive income | ||||||||
Change in unrealized gain (loss) on securities available for sale, net of reclassification and tax | [1] | 0 | 0 | 0 | 25,222 | 25,222 | 25,222 | |
Transferred securities, net of tax | [1] | 0 | 0 | 0 | (783) | (783) | (783) | |
Reclassification adjustment on cash flows hedges, net of tax | [1] | 0 | 0 | 0 | (481) | (481) | (481) | |
Net loss, settlement cost and amortization of net (gain) loss on defined benefit pension plans, net of tax | [1] | 0 | 0 | 0 | 1,882 | 1,882 | 1,882 | |
Total comprehensive income | [1] | 76,086 | ||||||
Acquisition - Monroe Bancorp | 7,575 | 82,495 | 0 | 0 | 90,070 | |||
Dividends - common stock | 0 | 0 | (19,889) | 0 | (19,889) | |||
Common stock issued | 15 | 151 | 0 | 0 | 166 | |||
Common stock repurchased | (33) | (308) | 0 | 0 | (341) | |||
Stock based compensation expense | 0 | 2,551 | 0 | 0 | 2,551 | |||
Stock activity under incentive comp plans | 12 | 298 | (63) | 0 | 247 | |||
Balance at Sep. 30, 2011 | $ 94,752 | $ 834,060 | $ 74,312 | $ 24,571 | $ 1,027,695 | |||
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Income Taxes | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | NOTE 16 - INCOME TAXES 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 statement of income for the three and nine months ended September 30:
In accordance with ASC 740-270, Accounting for Interim Reporting, the provision for income taxes was recorded at September 30, 2011 based on the current estimate of the effective annual rate. For the three and nine months ended September 30, 2011, the effective tax rate was higher than the three and nine months ended September 30, 2010. The higher tax rate in the third quarter and nine months of 2011 is the result of an increase in pre-tax book income while tax-exempt income remained relatively stable. No valuation allowance was recorded at September 30, 2011 and 2010 because, based on our current expectations, Old National believes that it will generate sufficient income in the future years to realize deferred tax assets. Unrecognized Tax Benefits The Company and its subsidiaries file a consolidated U.S. federal income tax return, as well as filing various state returns. Unrecognized state income tax benefits are reported net of their related deferred federal income tax benefit. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Approximately $0.35 million of unrecognized tax benefits, if recognized, would favorably affect the effective income tax rate in future periods. The Company reversed $0.62 million related to uncertain tax positions accounted for under FASB ASC 740-10 (FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes). The positive $0.62 million income tax reversal relates to the 2007 statute of limitations expiring. The statute of limitations expired in the third quarter of 2011. As a result, the Company reversed a total of $0.62 million from its unrecognized tax benefit liability which includes $0.21 million of interest. |
Acquisition And Divestiture Activity (Narrative) (Details) (USD $) Share data in Millions, unless otherwise specified | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Jun. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2009 | Sep. 30, 2011
Minimum [Member]
Integra [Member] | Sep. 30, 2011
Maximum [Member]
Integra [Member] | Sep. 30, 2011
Monroe Bancorp [Member] | Mar. 31, 2011
Monroe Bancorp [Member] | Dec. 31, 2010
Monroe Bancorp [Member] | Sep. 30, 2011
Integra [Member] | |
Percentage of interest acquired | 100.00% | ||||||||||
Number of banking centers | 15 | ||||||||||
Number of shares received | 7.6 | ||||||||||
Value of shares received | $ 90,100,000 | ||||||||||
Definite-lived intangible assets acquired | 10,485,000 | ||||||||||
Goodwill deductible for income tax purposes | 29,000,000 | ||||||||||
Goodwill | 265,985,000 | 167,884,000 | 167,884,000 | 167,884,000 | 68,400,000 | ||||||
Assets under management | 328,000,000 | ||||||||||
Total acquisition-related transaction | 90,070,000 | 90,070,000 | 4,400,000,000 | ||||||||
Cash transaction payments | 1,300,000 | ||||||||||
Anticipated acquisition-related costs | 150,000 | ||||||||||
Customer relationship intangibles | 1,300,000 | 2,300,000 | 1,300,000 | ||||||||
Net tangible assets acquired | 11,156,000 | ||||||||||
Assets acquired | 1,832,089,000 | ||||||||||
Assumed liabilities | 1,832,089,000 | ||||||||||
Goodwill acquired | 68,429,000 | 29,673,000 | |||||||||
Deposits acquired | 4,300,000 | ||||||||||
Loss sharing agreements amount, 80% on assets acquired | 275,000,000 | ||||||||||
Zero percent for losses on acquisition | 275,000,000 | 467,200,000 | |||||||||
Accelerated amortization of intangible assets, period | 12 | ||||||||||
80% reimbursement for loss on acquisition | 467,200,000 | ||||||||||
Deposits held for sale, total | 185,000,000 | ||||||||||
Payments for basis points | 50 | ||||||||||
Payments made by First Midwest Bank | $ 500,000 |
Derivative Financial Instruments (Schedule Of Fair Value Of Derivative Financial Instruments) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Total derivative assets | $ 47,209 | $ 33,421 |
Total derivative liabilities | 39,599 | 29,060 |
Designated As Hedging Instrument [Member] | ||
Total derivative assets | 8,096 | 4,766 |
Designated As Hedging Instrument [Member] | Other Assets [Member] | ||
Total derivative assets | 8,096 | 4,766 |
Derivatives Not Designated As Hedging Instruments [Member] | ||
Total derivative assets | 39,113 | 28,655 |
Total derivative liabilities | 39,599 | 29,060 |
Derivatives Not Designated As Hedging Instruments [Member] | Other Assets [Member] | Interest Rate Contracts [Member] | ||
Total derivative assets | 38,927 | 28,269 |
Derivatives Not Designated As Hedging Instruments [Member] | Other Assets [Member] | Commodity Contracts [Member] | ||
Total derivative assets | 0 | 132 |
Derivatives Not Designated As Hedging Instruments [Member] | Other Assets [Member] | Mortgage Contracts [Member] | ||
Total derivative assets | 186 | 254 |
Derivatives Not Designated As Hedging Instruments [Member] | Other Liabilities [Member] | Interest Rate Contracts [Member] | ||
Total derivative liabilities | 39,599 | 28,928 |
Derivatives Not Designated As Hedging Instruments [Member] | Other Liabilities [Member] | Commodity Contracts [Member] | ||
Total derivative liabilities | $ 0 | $ 132 |
Commitments And Contingencies | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Commitments And Contingencies | |
Commitments And Contingencies | NOTE 18 - COMMITMENTS AND CONTINGENCIES LITIGATION In the normal course of business, Old National Bancorp and its subsidiaries have been named, from time to time, as defendants in various legal actions. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Old National contests liability and/or the amount of damages as appropriate in each pending matter. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, Old National cannot predict with certainty the loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, or other relief, if any, might be. Subject to the foregoing, Old National believes, based on current knowledge and after consultation with counsel, that the outcome of such pending matters will not have a material adverse effect on the consolidated financial condition of Old National, although the outcome of such matters could be material to Old National's operating results and cash flows for a particular future period, depending on, among other things, the level of Old National's revenues or income for such period. In November 2002, several beneficiaries of certain trusts filed a complaint against Old National and Old National Trust Company in the United States District Court for the Western District of Kentucky relating to the administration of the trusts in 1997. The complaint, as amended, alleged that Old National (through a predecessor), as trustee, mismanaged termination of a lease between the trusts and a tenant mining company. The complaint seeks, among other relief, unspecified damages, (costs and expenses, including attorneys' fees, and such other relief as the court might find just and proper.) On March 25, 2009, the Court granted summary judgment to Old National concluding that the plaintiffs do not have standing to sue Old National in this matter. The plaintiffs subsequently filed a motion to alter or amend the judgment with the Court. The Plaintiffs motion to alter or amend the judgment was granted by the Court on July 29, 2009, reversing the Court's March 25, 2009 Order as to standing. The July 29, 2009 Order permitted Old National to file a new motion for summary judgment with respect to issues that had not been resolved by the Court. On December 10, 2009, the Court granted Old National partial summary judgment and also granted a motion by Plaintiffs to amend their complaint. The Court's December 10, 2009 Order permitted Old National to file a new motion for summary judgment on the amended complaint. Old National filed its motion for summary judgment on January 22, 2010, which was granted in part and denied in part on August 6, 2010. Old National filed its fourth motion for summary judgment in April 2011 that has the potential to dispose of the case if granted by the Court. In addition, a mediation session was held in March 2011 and settlement discussions continued between Old National and the Plaintiffs. Settlement negotiations became meaningful in mid-August of 2011. Although Old National continues to believe that it has meritorious defenses to each of the claims in the lawsuit, given the risks and uncertainty of litigation Old National reached a tentative settlement with the plaintiffs in mid-September of 2011. As such, two million dollars was accrued in the third quarter of 2011 in anticipation of negotiating final settlement and full resolution of this matter during the fourth quarter of 2011. In November 2010, Old National was named in a class action lawsuit, much like many other banks, challenging Old National Bank's checking account practices. The plaintiff seeks damages and other relief, including restitution. Old National believes it has meritorious defenses to the claims brought by the plaintiff. At this phase of the litigation, it is not possible for management of Old National to determine the probability of a material adverse outcome or reasonably estimate the amount of any loss. No class has yet been certified and discovery is ongoing. LEASES Old National rents certain premises and equipment under operating leases, which expire at various dates. Many of these leases require the payment of property taxes, insurance premiums, maintenance and other costs. In some cases, rentals are subject to increase in relation to a cost-of-living index. In prior periods, Old National entered into sale leaseback transactions for four office buildings in downtown Evansville, Indiana and eighty-eight financial centers. The properties sold had a carrying value of $163.6 million. Old National received cash proceeds of approximately $287.4 million, net of selling costs, resulting in a gain of approximately $123.9 million. Approximately $119.5 million of the gain was deferred and is being recognized over the term of the leases. As of September 30, 2011, $25.9 million of the deferred gain had been recognized. The leases have original terms ranging from five to twenty-four years, and Old National has the right, at its option, to extend the term of certain of the leases for four additional successive terms of five years. Under the lease agreements, Old National is obligated to pay base rents of approximately $25.4 million per year. In March 2009, Old National acquired the Indiana retail branch banking network of Citizens Financial Group. The network included 65 leased locations. As of September 30, 2011, Old National had closed 24 of these locations and terminated the leases. The leases have terms of less than one year to ten years. Under the remaining lease agreements, Old National is obligated to pay a base rent of approximately $2.2 million per year. In January 2011, Old National acquired Monroe Bancorp. Included in the acquisition are two leased branches, a leased operations center, five leased ATM locations and leased space in three retirement centers. The leased space in one of the retirement centers was closed in the second quarter of 2011. The leases have terms of one to five years. Under the lease agreements, Old National is obligated to pay a base rent of approximately $0.3 million per year. On July 29, 2011, Old National acquired the banking operations of Integra Bank N.A. ("Integra") in an FDIC assisted transaction. The physical branch locations and leases were not immediately acquired by Old National in the acquisition. Old National has an option, exercisable for 90 days following the closing of the acquisition, to acquire, at fair value, any bank premises that were owned by, and to assume any leases relating to bank premises held by Integra. Old National is currently reviewing the bank premises and related leases of Integra and currently expects to acquire 16 of the Integra facilities and leases. Rent expense of $1.1 million was recorded during the third quarter of 2011 related to these properties. CREDIT-RELATED FINANCIAL INSTRUMENTS In the normal course of business, Old National's banking affiliates have entered into various agreements to extend credit, including loan commitments of $1.196 billion and standby letters of credit of $80.6 million at September 30, 2011. At September 30, 2011, approximately $1.007 billion of the loan commitments had fixed rates and $189 million had floating rates, with the floating interest rates ranging from 2.0% to 19.8%. At December 31, 2010, loan commitments were $1.106 billion and standby letters of credit were $74.3 million. These commitments are not reflected in the consolidated financial statements. At September 30, 2011 and December 31, 2010, the balance of the allowance for unfunded loan commitments was $5.9 million and $3.8 million, respectively. At September 30, 2011 and December 31, 2010, Old National had credit extensions of $24.6 million and $25.7 million, respectively, with various unaffiliated banks related to letter of credit commitments issued on behalf of Old National's clients. At September 30, 2011 and December 31, 2010, Old National provided collateral to the unaffiliated banks to secure credit extensions totaling $18.2 million and $20.2 million, respectively. Old National did not provide collateral for the remaining credit extensions. |
Covered Loans (Composition Of Covered Loans By Lending Classification) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 |
---|---|---|---|
Covered loans | $ 711,266 | $ 0 | $ 0 |
Allowance for loan losses | (303) | 0 | 0 |
Covered loans, net | 710,963 | ||
Commercial [Member] | |||
Covered loans | 154,251 | ||
Commercial Real Estate [Member] | |||
Covered loans | 367,758 | ||
Residential [Member] | |||
Covered loans | 50,726 | ||
Consumer [Member] | |||
Covered loans | $ 138,531 |
Finance Receivables And Allowance For Credit Losses (Schedule Of Activity Of Purchased Impaired Loans) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Outstanding balance | $ 74,189 | |
Carrying amount, net of allowance | 73,001 | |
Related Allowance | 1,188 | 1,600 |
Commercial [Member] | ||
Purchased impaired loans | 1,946 | |
Carrying amount, net of allowance | 17,165 | 14,721 |
Commercial Real Estate [Member] | ||
Purchased impaired loans | 24,750 | |
Consumer [Member] | ||
Purchased impaired loans | 47,095 | |
Residential [Member] | ||
Purchased impaired loans | $ 398 |
Basis Of Presentation | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Basis Of Presentation | |
Basis Of Presentation | NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned affiliates (hereinafter collectively referred to as "Old National") and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance for loan losses, valuation and impairment of securities, goodwill and intangibles, derivative financial instruments, and income taxes are particularly subject to change. In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of September 30, 2011 and 2010, and December 31, 2010, and the results of its operations for the three and nine months ended September 30, 2011 and 2010. Interim results do not necessarily represent annual results. These financial statements should be read in conjunction with Old National's Annual Report for the year ended December 31, 2010. All significant intercompany transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform with the 2011 presentation. Such reclassifications had no effect on net income or shareholders' equity. |
Other Real Estate Owned | 9 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||
Other Real Estate Owned | |||||||||||||||||||||||||||||||
Other Real Estate Owned | NOTE 10 – OTHER REAL ESTATE OWNED The following table shows the carrying amount for other real estate owned at September 30, 2011 and December 31, 2010:
Covered OREO expenses and valuation write-downs are recorded in the noninterest expense section of the consolidated statements of income. Under the loss sharing agreements, the FDIC will reimburse the Company for 80% of expenses and valuation write-downs related to covered assets up to $275.0 million, losses in excess of $275.0 million up to $467.2 million at 0%, and 80% of losses in excess of $467.2 million. The portion of these expenses that is reimbursable is recorded as the change in the FDIC indemnification asset in the noninterest income section of the consolidated statements of income. |
Investment Securities (Pooled Trust Preferred Securities) (Details) (USD $) In Thousands, unless otherwise specified | 6 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Jun. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member] | Dec. 31, 2010
Pooled Trust Preferred Securities Group 1 [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
TROPC 2003-1A [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
MM Community Funding IX [Member] | Sep. 30, 2010
Pooled Trust Preferred Securities Group 1 [Member]
MM Community Funding IX [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
Reg Div Funding 2004 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
Pretsl XII [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
Pretsl XV [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
Reg Div Funding 2005 [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
MM Community Funding II [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
Pretsl XXVII LTD [Member] | Sep. 30, 2011
Pooled Trust Preferred Securities Group 1 [Member]
Trapeza Ser 13A [Member] | Sep. 30, 2011
Single Issuer Trust Preferred Securities [Member] | Sep. 30, 2011
Single Issuer Trust Preferred Securities [Member]
First Empire Cap (M&T) 1 [Member] | Sep. 30, 2011
Single Issuer Trust Preferred Securities [Member]
First Empire Cap (M&T) 2 [Member] | Sep. 30, 2011
Single Issuer Trust Preferred Securities [Member]
Fleet Cap Tr V (BOA) [Member] | Sep. 30, 2011
Single Issuer Trust Preferred Securities [Member]
JP Morgan Chase Cap XIII [Member] | Sep. 30, 2011
Trust Preferred Securities [Member] | Sep. 30, 2011
TROPC 2003-1A [Member] | Sep. 30, 2011
MM Community Funding IX [Member] | Sep. 30, 2011
Reg Div Funding 2004 [Member] | Sep. 30, 2011
Pretsl XII [Member] | Sep. 30, 2011
Pretsl XV [Member] | Sep. 30, 2011
Reg Div Funding 2005 [Member] | Sep. 30, 2011
MM Community Funding II [Member] | Sep. 30, 2011
Pretsl XXVII LTD [Member] | Sep. 30, 2011
Trapeza Ser 13A [Member] | |||||||||||||||||
Pooled trust preferred securities, Class | A4L | B-2 | B-2 | B-1 | B-1 | B-1 | B | B | A2A | |||||||||||||||||||||||||||||||||||||||
Lowest Credit Rating | C | [1] | D | [1] | C | [1] | D | [1] | C | [1] | C | [1] | C | [1] | BB | [1] | CC | [1] | CCC- | [1] | BBB- | [1] | BBB- | [1] | BB+ | [1] | BBB+ | [1] | ||||||||||||||||||||
Amortized Cost | $ 2,205,285 | $ 1,953,842 | $ 27,346 | $ 27,346 | $ 27,368 | $ 3,390 | $ 977 | $ 2,076 | $ 2,107 | $ 4,194 | $ 2,886 | $ 1,695 | $ 311 | $ 987 | $ 4,835 | $ 9,385 | $ 11,926 | $ 955 | $ 2,904 | $ 3,357 | $ 4,710 | $ 39,272 | ||||||||||||||||||||||||||
Investment securities available-for-sale | 2,253,089 | 1,960,222 | 2,190,804 | 7,530 | 7,530 | 8,400 | 198 | 859 | 690 | 1,508 | 568 | 58 | 959 | 655 | 2,035 | 10,190 | 1,004 | 3,013 | 2,295 | 3,878 | 17,720 | |||||||||||||||||||||||||||
Unrealized Gain/(Loss) | (19,816) | (779) | (1,217) | (3,504) | (1,378) | (1,127) | (253) | (28) | (4,180) | (7,350) | (1,736) | 49 | 109 | (1,062) | (832) | (21,552) | ||||||||||||||||||||||||||||||||
Realized Losses | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||
Number of Issuers Currently Performing | 18 | 16 | 24 | 50 | 49 | 23 | 5 | 33 | 36 | |||||||||||||||||||||||||||||||||||||||
Number of Issuers Currently Remaining | 39 | 31 | 45 | 77 | 72 | 49 | 8 | 49 | 56 | |||||||||||||||||||||||||||||||||||||||
Actual Deferrals and Defaults as a Percent of Original Collateral | 41.70% | 41.10% | 46.00% | 30.40% | 36.40% | 49.30% | 4.70% | 28.10% | 29.20% | |||||||||||||||||||||||||||||||||||||||
Expected Defaults as a Percentage of Remaining Performing Collateral | 17.50% | 8.50% | 6.80% | 6.70% | 10.00% | 29.00% | 0.00% | 23.70% | 4.20% | |||||||||||||||||||||||||||||||||||||||
Excess Subordination as a Percentage of Current Performing Collateral | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 26.90% | 35.60% | 39.80% | |||||||||||||||||||||||||||||||||||||||
|
Finance Receivables And Allowance For Credit Losses (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | Sep. 30, 2011
Nonaccrual Loan [Member] | Dec. 31, 2010
Nonaccrual Loan [Member] | Sep. 30, 2011
Commercial [Member] | Sep. 30, 2011
Commercial [Member] | Dec. 31, 2010
Commercial [Member] | Jun. 30, 2010
Commercial [Member] | Sep. 30, 2011
Commercial Real Estate [Member] | Dec. 31, 2010
Commercial Real Estate [Member] | |
Loans placed on nonaccrual when past due, number days | 90 | |||||||||||
Commercial loan concentrated | $ 0 | $ 0 | ||||||||||
Percentage on portfolio | 10.00% | 10.00% | ||||||||||
Average balance of impaired loans | 66,400,000 | 50,100,000 | 77,851,000 | 66,429,000 | ||||||||
Interest income | 0 | |||||||||||
Purchased loans | 6,300,000 | |||||||||||
Loans modified in a troubled debt restructuring | 9,400,000 | 4,800,000 | 3,800,000 | 3,900,000 | 5,500,000 | 1,000,000 | ||||||
Allowance for loan losses | 1,188,000 | 1,188,000 | 1,600,000 | 2,400,000 | ||||||||
Loans on non accrual status | 250,000 | |||||||||||
Maturity of loans in days, minimum | 120 | |||||||||||
Maturity of loans in days, maximum | 180 | |||||||||||
Carrying value of credit impaired loans | 166,400,000 | 166,400,000 | ||||||||||
Accretable difference expected to be accreted into future earnings | 25,500,000 | 25,500,000 | ||||||||||
Accretion recorded as loan interest income | 10,000,000 | |||||||||||
Reversal of allowances for loan losses | 0 | |||||||||||
Purchased impaired loans without reasonable cash flow estimate | 1,200,000 | 1,200,000 | ||||||||||
Loan participations | 217,900,000 | 217,900,000 | ||||||||||
Loan participations sold | 126,600,000 | 126,600,000 | ||||||||||
Loan participations retained | $ 91,300,000 | $ 91,300,000 |
Finance Receivables And Allowance For Credit Losses (Schedule Of Accretable Difference On Purchased Loans) (Details) (USD $) In Thousands | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Finance Receivables And Allowance For Credit Losses | |
Beginning, Balance | $ 0 |
New loans purchased | 25,520 |
Accretion of income | (10,006) |
Reclassifications from (to) nonaccretable difference | 18,851 |
Disposals/other adjustments | (134) |
Ending, Balance | $ 34,231 |
Other Real Estate Owned (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||
Other Real Estate Owned | |||||||||||||||||||||||||||||||
Carrying Amount For Other Real Estate Owned |
|
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