Other Real Estate Owned

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

Other Real Estate Owned

NOTE 8 – OTHER REAL ESTATE OWNED

The following table presents activity in other real estate owned for the years ended December 31, 2016 and 2015:

(dollars in thousands)	Other Real Estate Owned (1)			Other Real Estate Owned, Covered
2016
Balance at January 1, 2016	$	7,594		$	4,904
Additions (2)		22,905			2,093
Sales		(13,638	)		(1,454	)
(Impairment)/recovery of value		(1,986	)		(1,872	)
Reclassification due to termination of the loss share agreements, effective June 22, 2016		3,671			(3,671	)
Balance at December 31, 2016	$	18,546		$	—
2015
Balance at January 1, 2015	$	7,241		$	9,121
Additions		5,665			1,487
Sales		(5,710	)		(5,373	)
(Impairment)/recovery of value		398			(331	)
Balance at December 31, 2015	$	7,594		$	4,904

(1) Includes repossessed personal property of $0.3 million at December 31, 2016 and $0.2 million at December 31, 2015.

(2) Includes other real estate owned of $17.3 million acquired from Anchor in May 2016.

At December 31, 2016, foreclosed residential real estate property included in the table above totaled $1.8 million. At December 31, 2016, consumer mortgage loans collateralized by residential real property that were in the process of foreclosure totaled $2.8 million.

Old National entered into an agreement with the FDIC on June 22, 2016 to terminate its loss share agreements. As a result of the termination of the loss share agreements, the remaining other real estate owned that was covered by the loss share arrangements were reclassified to noncovered other real estate owned effective June 22, 2016.

Prior to the termination of the loss share agreements, covered OREO expenses and valuation write-downs were recorded in the noninterest expense section of the consolidated statements of income. Under the loss sharing agreements, the FDIC would have reimbursed us for 80% of expenses and valuation write-downs related to covered assets up to $275.0 million, an amount which we never reached. The reimbursable portion of these expenses was recorded in the FDIC indemnification asset. As a result of the termination of the loss share agreements, all future gains and losses associated with covered assets will be recognized entirely by Old National since the FDIC will no longer be sharing in these gains and losses.