Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

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 six months ended June 30:

		Community
(dollars in thousands)		Banking			Treasury			Other		Total
Three months ended June 30, 2012
Net interest income	$	66,866		$	(5,508	)	$	14,615	$	75,973
Provision for loan losses		(3,466	)		0			3,859		393
Noninterest income		27,212			7,919			13,411		48,542
Noninterest expense		61,005			2,331			22,691		86,027
Income (loss) before income taxes		36,539			80			1,476		38,095
Total assets		4,593,862			3,608,140			487,554		8,689,556

Three months ended June 30, 2011
Net interest income	$	73,975	$	(11,035	)	$	(621	)	$	62,319
Provision for loan losses		3,207		0			0			3,207
Noninterest income		30,173		1,633			11,783			43,589
Noninterest expense		69,066		363			10,329			79,758
Income (loss) before income taxes		31,875		(9,765	)		833			22,943
Total assets		4,405,806		3,518,480			94,562			8,018,848

Six months ended June 30, 2012
Net interest income	$	136,298		$	(11,898	)	$	25,846	$	150,246
Provision for loan losses		(3,720	)		0			6,169		2,449
Noninterest income		53,948			10,375			33,352		97,675
Noninterest expense		122,824			4,443			50,047		177,314
Income (loss) before income taxes		71,142			(5,966	)		2,982		68,158
Total assets		4,593,862			3,608,140			487,554		8,689,556

Six months ended June 30, 2011
Net interest income	$	143,064	$	(18,206	)	$	(1,172	)	$	123,686
Provision for loan losses		6,519		0			0			6,519
Noninterest income		52,189		4,060			30,161			86,410
Noninterest expense		131,243		1,777			26,663			159,683
Income (loss) before income taxes		57,491		(15,923	)		2,326			43,894
Total assets		4,405,806		3,518,480			94,562			8,018,848

Included in net interest income for the three and six months ended June 30, 2012 in the "Community Banking" segment is approximately $6.3 million and $13.3 million, respectively, and in the "Other" segment is approximately $10.1 million and $19.2 million, respectively, associated with the acquisition of Integra Bank. Noninterest expense for the three and six months ended June 30, 2012 includes $2.4 million and $5.2 million, respectively, of costs in the "Community Banking" segment and $1.8 million and $11.8 million, respectively, of costs in the "Other" segment associated with the addition of Integra Bank. Included in income before income taxes for the three and six months ended June 30, 2012 is $9.5 million and $17.2 million, respectively, in the "Community Banking" segment and $1.1 million and $3.9 million, respectively, in the "Other" segment associated with the addition of Integra Bank.