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Regulatory Restrictions
 12 Months Ended
Dec. 31, 2017
Text Block [Abstract]  
Regulatory Restrictions

NOTE 24 – REGULATORY RESTRICTIONS

Restrictions on Cash and Due from Banks

Old National’s affiliate bank is required to maintain reserve balances on hand and with the Federal Reserve Bank that are interest bearing and unavailable for investment purposes. The reserve balances were $100.9 million at December 31, 2017 and $85.4 million at December 31, 2016. In addition, Old National had cash and due from banks which was held as collateral for collateralized swap positions of $5.7 million at December 31, 2017 and $3.5 million at December 31, 2016.

Restrictions on Transfers from Affiliate Bank

Regulations limit the amount of dividends an affiliate bank can declare in any year without obtaining prior regulatory approval. Prior regulatory approval is required if dividends to be declared in any year would exceed net earnings of the current year plus retained net profits for the preceding two years. Prior regulatory approval to pay dividends was not required in 2015, 2016, or 2017 and is not currently required.

Restrictions on the Payment of Dividends

Old National has traditionally paid a quarterly dividend to common stockholders. The payment of dividends is subject to legal and regulatory restrictions. Any payment of dividends in the future will depend, in large part, on Old National’s earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors.

Capital Adequacy

Old National and Old National Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can elicit certain mandatory actions by regulators that, if undertaken, could have a direct material effect on Old National’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Old National and Old National Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require Old National and Old National Bank to maintain minimum amounts and ratios as set forth in the following tables.

At December 31, 2017, Old National and Old National Bank exceeded the regulatory minimums and Old National Bank met the regulatory definition of well-capitalized based on the most recent regulatory notification.

The following table summarizes capital ratios for Old National and Old National Bank as of December 31:

 

     Actual     Fully Phased-In
Regulatory Guidelines
Minimum (1)		     Well Capitalized
Guidelines		  

(dollars in thousands)

    Amount      Ratio     Amount      Ratio     Amount      Ratio  

2017

                

Total capital to risk-weighted assets

                

Old National Bancorp

    $ 1,424,123        11.40 %    $ 1,311,600        10.50 %    $ N/A        N/A % 

Old National Bank

      1,458,546        11.73       1,305,076        10.50       1,242,929        10.00  

Common equity Tier 1 capital to risk-weighted assets

                

Old National Bancorp

      1,298,326        10.39       874,400        7.00       N/A        N/A  

Old National Bank

      1,393,059        11.21       870,051        7.00       807,904        6.50  

Tier 1 capital to risk-weighted assets

                

Old National Bancorp

      1,298,326        10.39       1,061,772        8.50       N/A        N/A  

Old National Bank

      1,393,059        11.21       1,056,490        8.50       994,344        8.00  

Tier 1 capital to average assets

                

Old National Bancorp

      1,298,326        8.28       627,258        4.00       N/A        N/A  

Old National Bank

      1,393,059        8.93       623,758        4.00       779,697        5.00  

2016

                

Total capital to risk-weighted assets

                

Old National Bancorp

    $ 1,229,878        12.18 %    $ 1,060,662        10.50 %    $ N/A        N/A % 

Old National Bank

      1,240,180        12.35       1,054,305        10.50       1,004,100        10.00  

Common equity Tier 1 capital to risk-weighted assets

                

Old National Bancorp

      1,162,817        11.51       707,108        7.00       N/A        N/A  

Old National Bank

      1,187,151        11.82       702,870        7.00       652,665        6.50  

Tier 1 capital to risk-weighted assets

                

Old National Bancorp

      1,176,849        11.65       858,631        8.50       N/A        N/A  

Old National Bank

      1,187,151        11.82       853,485        8.50       803,280        8.00  

Tier 1 capital to average assets

                

Old National Bancorp

      1,176,849        8.43       558,673        4.00       N/A        N/A  

Old National Bank

      1,187,151        8.55       555,161        4.00       693,951        5.00  

 

N/A = not applicable

(1) When fully phased-in on January 1, 2019, Basel III Capital Rules will require banking organizations to maintain: a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer”; a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer; a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer; and a minimum ratio of Tier 1 capital to adjusted average consolidated assets of at least 4.0%.