Fair Value (Tables)

6 Months Ended

Jun. 30, 2012

Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis


				Fair Value Measurements at June 30, 2012 Using
						Significant
				Quoted Prices in		Other		Significant
				Active Markets for		Observable		Unobservable
		Carrying		Identical Assets		Inputs		Inputs
(dollars in thousands)		Value		(Level 1)		(Level 2)		(Level 3)

Financial Assets
Trading securities	$	2,918	$	2,918	$	0	$	0
Investment securities available-for-sale:
U.S. Treasury		15,598		15,598		0		0
U.S. Government-sponsored entities and agencies		347,289		0		347,289		0
Mortgage-backed securities - Agency		1,140,942		0		1,140,942		0
Mortgage-backed securities - Non-agency		73,747		0		73,747		0
States and political subdivisions		462,065		0		461,076		989
Pooled trust preferred securities		8,460		0		0		8,460
Other securities		160,161		0		160,161		0
Residential loans held for sale		4,366		0		4,366		0
Derivative assets		40,953		0		40,953		0
Financial Liabilities
Derivative liabilities		33,601		0		33,601		0


				Fair Value Measurements at December 31, 2011 Using
						Significant
				Quoted Prices in		Other		Significant
				Active Markets for		Observable		Unobservable
		Carrying		Identical Assets		Inputs		Inputs
(dollars in thousands)		Value		(Level 1)		(Level 2)		(Level 3)

Financial Assets
Trading securities	$	2,816	$	2,816	$	0	$	0
Investment securities available-for-sale:
U.S. Treasury		65,769		65,769		0		0
U.S. Government-sponsored entities and agencies		173,185		0		173,185		0
Mortgage-backed securities - Agency		1,182,255		0		1,182,255		0
Mortgage-backed securities - Non-agency		85,900		0		85,900		0
States and political subdivisions		402,844		0		401,538		1,306
Pooled trust preferred securities		7,327		0		0		7,327
Other securities		153,996		0		153,996		0
Residential loans held for sale		4,528		0		4,528		0
Derivative assets		44,415		0		44,415		0
Financial Liabilities
Derivative liabilities		37,332		0		37,332		0

Reconciliation Of All Assets Measured At Fair Value On A Recurring Basis Using Significant Unobservable Inputs (Level 3)


		Fair Value Measurements using
		Significant Unobservable Inputs
		(Level 3)
		Pooled Trust Preferred			State and
		Securities Available-			Political
(dollars in thousands)		for-Sale			Subdivisions
Beginning balance, January 1, 2012	$	7,327		$	1,306
Accretion/(amortization) of discount or premium		8			3
Payments received		(43	)		0
Matured securities		0			(320	)
Credit loss write-downs		(161	)		0
Increase/(decrease) in fair value of securities		1,329			0
Ending balance, June 30, 2012	$	8,460		$	989


	Fair Value Measurements
	using Significant
	Unobservable Inputs
	(Level 3)
	Pooled Trust Preferred
	Securities Available-
(dollars in thousands)	for-Sale
Beginning balance, January 1, 2011	$	8,400
Accretion/(amortization) of discount or premium		(35	)
Payments received		(13	)
Credit loss write-downs		0
Increase/(decrease) in fair value of securities		1,386
Ending balance, June 30, 2011	$	9,738

Quantitative Information About Significant Unobservable Inputs Used In Fair Value Measurements

The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at	Valuation	Unobservable	Range (Weighted
(dollars in thousands)	June 30, 2012	Techniques	Input	Average)
Pooled trust preferred securities	8,460	Discounted cash flow	Constant prepayment rate (a)	0.00	%
			Additional asset defaults (b)	1% - 32% (8%)
			Expected asset recoveries (c)	3% - 21% (14%)
State and political subdivision securities	989	Discounted cash flow	No unobservable inputs	NA
			Illiquid local municipality issuance
			Old National owns 100%
			Carried at par

(a)	Assuming no prepayments.
(b)	Each currently performing pool asset is assigned a default probability based on the banking environment, which is adjusted for specific issuer evaluation, of 0%, 50% or 100%.
(c)	Each currently defaulted pool asset is assigned a recovery probability based on specific issuer evaluation of 0%, 25% or 100%.

The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:


		Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at	Valuation	Unobservable	Range (Weighted
(dollars in thousands)	June 30, 2012	Techniques	Input	Average)
Collateral Dependent Impaired Loans
Commercial loans	21,450	Fair value of collateral	Discount for type of property,	0% - 50% (25%)
			age of appraisal and current
			status
Commercial real estate loans	20,205	Fair value of collateral	Discount for type of property,	10% - 40% (25%)
			age of appraisal and current
			status
Foreclosed Assets
Commercial real estate	31,292	Fair value of collateral	Discount for type of property,	10% - 40% (25%)
			age of appraisal and current
			status
Residential	1,290	Fair value of collateral	Discount for type of property,	10% - 45% (25%)
			age of appraisal and current
			status
Repossessed personal property	353	Fair value of collateral	Discount for type of property,	0% - 25% (15%)
			age of appraisal and current
			status

Assets Measured At Fair Value On A Non-Recurring Basis


			Fair Value Measurements at June 30, 2012 Using
						Significant
				Quoted Prices in		Other		Significant
				Active Markets for		Observable		Unobservable
		Carrying		Identical Assets		Inputs		Inputs
(dollars in thousands)		Value		(Level 1)		(Level 2)		(Level 3)
Collateral Dependent Impaired Loans
Commercial loans	$	21,450	$	0	$	0	$	21,450
Commercial real estate loans		20,205		0		0		20,205
Foreclosed Assets
Commercial real estate		31,292		0		0		31,292
Residential		1,290		0		0		1,290
Repossessed personal property		353		0		0		353


			Fair Value Measurements at December 31, 2011 Using
						Significant
				Quoted Prices in		Other		Significant
				Active Markets for		Observable		Unobservable
		Carrying		Identical Assets		Inputs		Inputs
(dollars in thousands)		Value		(Level 1)		(Level 2)		(Level 3)
Collateral Dependent Impaired Loans
Commercial loans	$	23,150	$	0	$	0	$	23,150
Commercial real estate loans		14,894		0		0		14,894

Schedule Of Difference Between The Aggregate Fair Value And The Aggregate Remaining Principal Balance


		Aggregate				Contractual
(dollars in thousands)		Fair Value		Difference		Principal
Residential loans held for sale	$	4,366	$	136	$	4,230


		Aggregate				Contractual
(dollars in thousands)		Fair Value		Difference		Principal
Residential loans held for sale	$	6,104	$	165	$	5,939

Changes In Fair Value For Items Measured At Fair Value Pursuant To Election Of The Fair Value

Changes in Fair Value for the Three Months ended June 30, 2012, for Items
Measured at Fair Value Pursuant to Election of the Fair Value Option

							Total Changes
							in Fair Values
		Other					Included in
		Gains and		Interest		Interest	Current Period
(dollars in thousands)		(Losses)		Income		(Expense)	Earnings
Residential loans held for sale	$	83	$	0	$	0	$83

Changes in Fair Value for the Six Months ended June 30, 2012, for Items
Measured at Fair Value Pursuant to Election of the Fair Value Option

							Total Changes
							in Fair Values
		Other					Included in
		Gains and		Interest		Interest	Current Period
(dollars in thousands)		(Losses)		Income		(Expense)	Earnings
Residential loans held for sale	$	37	$	0	$	0	$37


Changes in Fair Value for the Three Months ended June 30, 2012, for Items
Measured at Fair Value Pursuant to Election of the Fair Value Option

							Total Changes
							in Fair Values
		Other					Included in
		Gains and		Interest		Interest	Current Period
(dollars in thousands)		(Losses)		Income		(Expense)	Earnings
Residential loans held for sale	$	83	$	0	$	0	$83


Changes in Fair Value for the Six Months ended June 30, 2012, for Items
Measured at Fair Value Pursuant to Election of the Fair Value Option

							Total Changes
							in Fair Values
		Other					Included in
		Gains and		Interest		Interest	Current Period
(dollars in thousands)		(Losses)		Income		(Expense)	Earnings
Residential loans held for sale	$	37	$	0	$	0	$37

Carrying Amounts And Estimated Fair Values Of Financial Instruments, Not Previously Presented

The carrying amounts and estimated fair values of financial instruments, not previously presented in this note, at June 30, 2012 and December 31, 2011 are as follows:


			Fair Value Measurements at June 30, 2012 Using
						Significant
				Quoted Prices in		Other		Significant
				Active Markets for		Observable		Unobservable
		Carrying		Identical Assets		Inputs		Inputs
(dollars in thousands)		Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2012
Financial Assets
Cash, due from banks, federal funds sold and money market investments	$	263,046	$	263,046	$	0	$	0
Investment securities held-to-maturity:
U.S. Government-sponsored entities and agencies		175,568		0		187,230		0
Mortgage-backed securities - Agency		69,537		0		72,334		0
State and political subdivisions		215,836		0		231,146		0
Other securities		2,994		0		2,994		0
Federal Home Loan Bank stock		30,835		0		30,835		0
Loans, net (including covered loans):
Commercial		1,263,607		0		0		1,306,848
Commercial real estate		1,275,680		0		0		1,329,108
Residential real estate		1,158,519		0		0		1,247,048
Consumer credit		963,064		0		0		999,676
FDIC indemnification asset		127,717		0		0		103,654
Accrued interest receivable		44,163		21		20,418		23,724

Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	1,847,904	$	1,847,904	$	0	$	0
NOW, savings and money market deposits		3,570,538		3,570,538		0		0
Time deposits		1,251,831		0		1,281,957		0
Short-term borrowings:
Federal funds purchased		919		919		0		0
Repurchase agreements		345,081		345,081		0		0
Other borrowings:
Junior subordinated debenture		13,000		0		7,429		0
Repurchase agreements		50,000		0		54,031		0
Federal Home Loan Bank advances		207,312		0		0		207,312
Capital lease obligation		4,236		0		5,285		0
Accrued interest payable		3,919		0		3,919		0
Standby letters of credit		409		0		0		409

Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	0	$	0	$	0	$	1,712


		Carrying		Fair
(dollars in thousands)		Value		Value
December 31, 2011
Financial Assets
Cash, due from banks, federal funds sold
and money market investments	$	222,872	$	222,872
Investment securities held-to-maturity:
U.S. Government-sponsored entities and agencies		177,159		188,593
Mortgage-backed securities - Agency		84,075		87,380
State and political subdivisions		216,345		224,717
Other securities		7,011		7,009
Federal Home Loan Bank stock		30,835		30,835
Loans, net (including covered loans):
Commercial		1,321,445		1,366,316
Commercial real estate		1,366,311		1,421,941
Residential real estate		1,038,280		1,124,222
Consumer credit		983,107		1,014,807
FDIC indemnification asset		147,566		142,078
Accrued interest receivable		44,801		44,801
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	1,728,546	$	1,728,546
NOW, savings and money market deposits		3,435,353		3,435,353
Time deposits		1,447,664		1,481,854
Short-term borrowings:
Federal funds purchased		103,010		103,010
Repurchase agreements		321,725		321,722
Other short-term borrowings		114		114
Other borrowings:
Junior subordinated debenture		16,000		12,697
Subordinated notes		13,000		12,999
Repurchase agreements		50,000		54,484
Federal Home Loan Bank advances		208,360		225,711
Capital lease obligation		4,261		5,079
Accrued interest payable		5,239		5,239
Standby letters of credit		431		431
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	0	$	1,720

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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