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Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2011

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:


		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		0		0		0
Balance, September 30, 2010	$	128,011	$	39,873	$	167,884

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:


				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

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:


(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

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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