Covered Loans (Tables)

9 Months Ended

Sep. 30, 2013

The composition of covered loans by lending classification was as follows:


At September 30, 2013
(dollars in thousands)	Loans Accounted for Under ASC 310-30 (Purchased Credit Impaired)			Loans excluded from ASC 310-30 (1) (Not Purchased Credit Impaired)		Total Covered Purchased Loans
Commercial	$	14,818		$	20,486	$	35,304
Commercial real estate		88,526			15,010		103,536
Residential		30,009			137		30,146
Consumer		19,477			62,338		81,815

Covered loans		152,830			97,971		250,801
Allowance for loan losses		(5,012	)		—		(5,012	)

Covered loans, net	$	147,818		$	97,971	$	245,789

(1)	Includes loans with revolving privileges which are scoped out of FASB ASC 310-30 and certain loans which Old National elected to treat under the cost recovery method of accounting.

The following table is a roll-forward of acquired impaired loans accounted for under ASC 310-30 for the nine months ended September 30, 2013:


(dollars in thousands)	Contractual Cash Flows (1)			Nonaccretable Difference			Accretable Yield			Carrying Amount (2)
Balance at January 1, 2013	$	424,527		$	(90,996	)	$	(85,779	)	$	247,752
Principal reductions and interest payments		(119,564	)		—			—			(119,564	)
Accretion of loan discount		—			—			28,103			28,103
Changes in contractual and expected cash flows due to remeasurement		(20,348	)		37,597			(16,689	)		560
Removals due to foreclosure or sale		(8,586	)		746			(1,193	)		(9,033	)

Balance at September 30, 2013	$	276,029		$	(52,653	)	$	(75,558	)	$	147,818

(1)	The balance of contractual cash flows includes future contractual interest and is net of amounts charged off and interest collected on nonaccrual loans.

(2)	Carrying amount for this table is net of allowance for loan losses.

The following table is a roll-forward of acquired impaired loans accounted for under ASC 310-30 for the nine months ended September 30, 2012:


(dollars in thousands)	Contractual Cash Flows (1)			Nonaccretable Difference			Accretable Yield			Carrying Amount (2)
Balance at January 1, 2012	$	729,496		$	(180,655	)	$	(92,053	)	$	456,788
Principal reductions and interest payments		(153,170	)		—			—			(153,170	)
Accretion of loan discount		—			—			37,919			37,919
Changes in contractual and expected cash flows due to remeasurement		13,829			16,532			(35,678	)		(5,317	)
Removals due to foreclosure or sale		(27,373	)		11,137			(411	)		(16,647	)

Balance at September 30, 2012	$	562,782		$	(152,986	)	$	(90,223	)	$	319,573

(1)	The balance of contractual cash flows includes future contractual interest and is net of amounts charged off and interest collected on nonaccrual loans.

(2)	Carrying amount for this table is net of allowance for loan losses.

Accretable yield, or income expected to be collected on the covered loans accounted for under ASC 310-30, is as follows:


(dollars in thousands)	2013			2012
Balance at January 1,	$	85,779		$	92,053
New loans purchased		—			—
Accretion of income		(28,103	)		(37,919	)
Reclassifications from (to) nonaccretable difference		16,689			35,678
Disposals/other adjustments		1,193			411

Balance at September 30,	$	75,558		$	90,223

The following table shows a detailed analysis of the FDIC loss sharing asset for the nine months ended September 30, 2013 and 2012:


(dollars in thousands)	2013			2012
Balance at January 1,	$	116,624		$	168,881
Adjustments not reflected in income:
Established through acquisitions		—			—
Cash received from FDIC		(19,415	)		(38,736	)
Loan expenses to be reimbursed		1,469			2,437
Other		(1,204	)		(665	)
Adjustments reflected in income:
(Amortization) accretion		(6,814	)		(10,805	)
Impairment		115			187
Write-downs/sale of other real estate		1,965			7,854
Recovery amounts due to FDIC		(1,243	)		(1,914	)
Other		61			560

Balance at September 30,	$	91,558		$	127,799