Covered Loans (Tables)

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Composition of Covered Loans by Lending Classification

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

At June 30, 2014

Loans Accounted for

Loans excluded from

Under ASC 310-30

ASC 310-30 (1)

(Purchased Credit

(Not Purchased

Total Covered

(dollars in thousands)

Impaired)

Credit Impaired)

Purchased Loans

Commercial

8,889

12,755

21,644

Commercial real estate

47,432

3,582

51,014

Residential

24,840

152

24,992

Consumer

14,988

58,510

73,498

Covered loans

96,149

74,999

171,148

Allowance for loan losses

(1,484

)

(2,174

)

(3,658

)

Covered loans, net

94,665

72,825

167,490

(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.

Schedule of Acquired Impaired Loans

The following table is a roll-forward of acquired impaired loans accounted for under ASC 310-30 for the six months ended June 30, 2014:

Contractual

Nonaccretable

Accretable

Carrying

(dollars in thousands)

Cash Flows (1)

Difference

Yield

Amount (2)

Balance at January 1, 2014

251,042

(46,793

)

(73,211

)

131,038

Principal reductions and interest payments

(56,475

)

(828

)

(940

)

(58,243

)

Accretion of loan discount

—

24,950

Changes in contractual and expected cash flows due to remeasurement

(6,170

)

23,017

(14,494

)

2,353

Removals due to foreclosure or sale

(6,138

)

1,670

(965

)

(5,433

)

Balance at June 30, 2014

182,259

(22,934

)

(64,660

)

94,665

(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 six months ended June 30, 2013:


	Contractual			Nonaccretable			Accretable			Carrying
(dollars in thousands)	Cash Flows (1)			Difference			Yield			Amount (2)
Balance at January 1, 2013	$	424,527		$	(90,996	)	$	(85,779	)	$	247,752
Principal reductions and interest payments		(78,174	)		—			—			(78,174	)
Accretion of loan discount		—			—			19,174			19,174
Changes in contractual and expected cash flows due to remeasurement		(14,514	)		23,521			(8,873	)		134
Removals due to foreclosure or sale		(7,764	)		948			(1,663	)		(8,479	)

Balance at June 30, 2013	$	324,075		$	(66,527	)	$	(77,141	)	$	180,407

(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.

Schedule of Accretable Yield, or Income Expected to be Collected

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


(dollars in thousands)	2014			2013
Balance at January 1,	$	73,211		$	85,779
New loans purchased		—			—
Accretion of income		(24,950	)		(19,174	)
Reclassifications from (to) nonaccretable difference		14,494			8,873
Disposals/other adjustments		1,905			1,663

Balance at June 30,	$	64,660		$	77,141

Summary of FDIC Loss Sharing Asset

The following table shows a detailed analysis of the FDIC loss sharing asset for the six months ended June 30, 2014 and 2013:


(dollars in thousands)	2014			2013
Balance at January 1,	$	88,513		$	116,624
Adjustments not reflected in income:
Cash received from FDIC		(20,306	)		(13,098	)
Loan expenses to be reimbursed		(103	)		911
Other		1,140			(270	)
Adjustments reflected in income:
(Amortization) accretion		(15,988	)		(3,782	)
Higher (lower) loan loss expectations		(18	)		95
Write-downs/(gain) on sale of other real estate		(1,807	)		1,093
Recovery amounts due to FDIC		—			(1,243	)
Other		—			61

Balance at June 30,	$	51,431		$	100,391