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Loans Held for Sale
6 Months Ended
Jun. 30, 2013
Debt Disclosure [Abstract]  
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 June 30, 2013 and December 31, 2012, Old National had residential loans held for sale of $13.6 million and $12.6 million, respectively.

At June 30, 2013, Old National had taxable finance leases held for sale of $11.6 million. These leases were transferred from the commercial loan category at fair value and a loss of $0.2 million was recognized. The portfolio of leases held for sale has an average maturity of 2.7 years and interest rates ranging from 3.57% to 10.22%. The leases held for sale are to a variety of borrowers, with various types of equipment securing the leases, and all of the leases are current. Old National does not intend to sell its nontaxable finance leases.

During the first six months of 2013, commercial and commercial real estate loans held for investment of $3.6 million, including $0.4 million of purchased impaired loans, were reclassified to loans held for sale at the lower of cost or fair value and sold for $4.8 million, resulting in a charge-off of $0.2 million, recoveries of $0.4 million and other income of $1.0 million. At June 30, 2013, there were no loans held for sale under this arrangement.

During the first six months of 2012, commercial and commercial real estate loans held for investment of $1.6 million, including $1.5 million of purchased impaired loans, were reclassified to loans held for sale at the lower of cost or fair value and sold for $2.2 million, resulting in a charge-off of $0.1 million and a recovery of $0.7 million. At June 30, 2012, there were no loans held for sale under this arrangement.