Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

NOTE 21 – SEGMENT INFORMATION

Our business segments are defined as Banking, Insurance, and Other and are described below:

Banking

The banking segment provides a wide range of financial products and services to consumers and businesses. Loan products include commercial, commercial real estate, mortgage and other consumer loans. Deposit products include checking, savings, and time deposit accounts. This segment also provides cash management, private banking, brokerage, trust and investment advisory services. Products and services are delivered to customers in the states of Indiana, Kentucky, Illinois and Michigan through our branch locations, ATMs, on-line banking services, 24-hour telephone banking, client care call center, and a mobile banking service.

Insurance

The insurance segment offers full-service insurance brokerage services including commercial property and casualty, surety, loss control services, employee benefits consulting and administration, and personal insurance. Our agencies offer products that are issued and underwritten by various insurance companies not affiliated with us. In addition, we have two affiliated third party claims management companies that handle service claims for self-insured clients.

Other

Other Corporate Administrative units such as Human Resources or Finance, provide a wide-range of support to our other income earning segments. Expenses incurred by these support units are charged to the business segments through an internal cost allocation process, which may not be comparable to that of other companies. The other segment includes the unallocated portion of other corporate support functions, the elimination of intercompany transactions and our Corporate Treasury unit. Corporate Treasury activities consist of corporate asset and liability management. This unit’s assets and liabilities (and related interest income and expense) consist of investment securities, corporate-owned life insurance, and certain borrowings.

During the third quarter of 2014, Old National merged American National Trust & Investment Management Corp. into Old National Bank. As part of the merger, Old National re-evaluated its business segments and, as of September 30, 2014, Old National changed the composition of its reportable segments to those described above and restated all prior period information. The Wealth Management segment has been aggregated into the banking segment as this business has never been quantitatively significant. In addition, wealth management and banking have the same customers and distribution channels, similar products and services as well as similar economic performance.

Selected business segment financial information is shown in the following table for the three months ended March 31:

(dollars in thousands)	Banking		Insurance		Other			Total
Three months ended March 31, 2015
Net interest income	$	93,078	$	2	$	(2,087	)	$	90,993
Noninterest income		42,839		11,987		469			55,295
Noncash items:
Depreciation and software amortization		4,656		34		158			4,848
Provision for loan losses		1		—		—			1
Amortization of intangibles		2,605		476		—			3,081
Income tax expense (benefit)		9,297		615		(687	)		9,225
Segment profit		24,783		964		(4,841	)		20,906
Segment assets		11,804,609		60,700		85,998			11,951,307
Three months ended March 31, 2014
Net interest income	$	83,554	$	3	$	(79	)	$	83,478
Noninterest income		28,260		11,976		327			40,563
Noncash items:
Depreciation and software amortization		3,236		35		121			3,392
Provision for loan losses		37		—		—			37
Amortization of intangibles		1,430		407		—			1,837
Income tax expense (benefit)		11,224		803		(2,785	)		9,242
Segment profit		23,501		1,873		1,136			26,510
Segment assets		9,412,745		63,180		68,855			9,544,780

The banking segment noninterest income increased for the three months ended March 31, 2015 when compared to the three months ended March 31, 2014 primarily due to fee income associated with the acquisitions of Tower in April 2014, United in July 2014, LSB in November 2014, and Founders in January 2015. Also contributing to the increase in noninterest income in the banking segment was a favorable variance in adjustments to the FDIC indemnification asset. Banking segment assets increased at March 31, 2015 when compared to March 31, 2014 primarily due to the acquisitions of Tower, United, LSB, and Founders.