Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which we have elected the fair value option, are summarized below:

			Fair Value Measurements at December 31, 2019 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
Equity securities	$	6,842	$	6,842	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury		17,682		17,682		—		—
U.S. government-sponsored entities and agencies		592,984		—		592,984		—
Mortgage-backed securities - Agency		3,183,861		—		3,183,861		—
States and political subdivisions		1,275,643		—		1,275,603		40
Pooled trust preferred securities		8,222		—		—		8,222
Other securities		306,699		31,169		275,530		—
Residential loans held for sale		46,898		—		46,898		—
Derivative assets		51,301		—		51,301		—
Financial Liabilities
Derivative liabilities		12,393		—		12,393		—
			Fair Value Measurements at December 31, 2018 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
Equity securities	$	5,582	$	5,582	$	—	$	—
Investment securities available-for-sale:
U.S. Treasury		5,301		5,301		—		—
U.S. government-sponsored entities and agencies		628,151		—		628,151		—
Mortgage-backed securities - Agency		2,209,295		—		2,209,295		—
States and political subdivisions		940,429		—		936,321		4,108
Pooled trust preferred securities		8,495		—		—		8,495
Other securities		331,745		30,259		301,486		—
Residential loans held for sale		14,911		—		14,911		—
Derivative assets		29,005		—		29,005		—
Financial Liabilities
Derivative liabilities		12,550		—		12,550		—

Reconciliation of All Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Pooled Trust			State and
	Preferred			Political
(dollars in thousands)	Securities			Subdivisions
2019
Balance at beginning of period	$	8,495		$	4,108
Accretion (amortization) of discount		12			—
Sales/payments received		(62	)		(35	)
Increase (decrease) in fair value of securities		(223	)		—
Transfers out of Level 3		—			(4,033	)
Balance at end of period	$	8,222		$	40
2018
Balance at beginning of period	$	8,448		$	—
Accretion (amortization) of discount		17			(56	)
Sales/payments received		(338	)		—
Increase (decrease) in fair value of securities		368			28
Transfers into Level 3		—			4,136
Balance at end of period	$	8,495		$	4,108
2017
Balance at beginning of period	$	8,119		$	—
Accretion (amortization) of discount		17			—
Sales/payments received		(424	)		—
Increase (decrease) in fair value of securities		736			—
Balance at end of period	$	8,448		$	—

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:

			Valuation	Unobservable	Range (Weighted
(dollars in thousands)	Fair Value		Techniques	Input	Average)
December 31, 2019
Pooled trust preferred securities	$	8,222	Discounted cash flow	Constant prepayment rate (1)	0.00%
				Additional asset defaults (2)	6.2% - 8.0% (6.8%)
				Expected asset recoveries (3)	0.0% - 19.1% (6.0%)
State and political subdivisions		40	Discounted cash flow	No observable inputs	N/A
				Local municipality issuances
				Old National owns 100%
				Carried at par
December 31, 2018
Pooled trust preferred securities	$	8,495	Discounted cash flow	Constant prepayment rate (1)	0.00%
				Additional asset defaults (2)	6.8% - 8.5% (7.3%)
				Expected asset recoveries (3)	0.00%
State and political subdivisions		4,108	Discounted cash flow	No observable inputs	N/A
				Local municipality issuances
				Old National owns 100%
				Carried at par

(1) Assuming no prepayments.

(2) 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%.

(3) 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:

			Valuation	Unobservable	Range (Weighted
(dollars in thousands)	Fair Value		Techniques	Input	Average)
December 31, 2019
Collateral Dependent Impaired     Loans
Commercial loans	$	10,361	Fair value of collateral	Discount for type of property, age of appraisal, and current status	0% - 50% (13%)
Commercial real estate loans (1)		11,610	Fair value of collateral	Discount for type of property, age of appraisal, and current status	45%
Foreclosed Assets
Commercial real estate (1)		21	Fair value of collateral	Discount for type of property, age of appraisal, and current status	43%
Residential (1)		22	Fair value of collateral	Discount for type of property, age of appraisal, and current status	21%
December 31, 2018
Collateral Dependent Impaired    Loans
Commercial loans	$	7,242	Fair value of collateral	Discount for type of property,	0% - 90% (35%)
				age of appraisal, and current status
Commercial real estate loans		29,125	Fair value of collateral	Discount for type of property,	0% - 50% (35%)
				age of appraisal, and current status
Foreclosed Assets
Residential		68	Fair value of collateral	Discount for type of property,	15% - 16% (15%)
				age of appraisal, and current status

(1) There was only one collateral dependent impaired commercial real estate loan, one foreclosed commercial real estate asset, and one foreclosed residential asset at December 31, 2019, so no range or weighted average is reported.

Assets Measured at Fair Value on a Non-Recurring Basis

Assets measured at fair value on a non-recurring basis at December 31, 2019 are summarized below:

			Fair Value Measurements at December 31, 2019 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	$	10,361	$	—	$	—	$	10,361
Commercial real estate loans		11,610		—		—		11,610
Foreclosed Assets:
Commercial real estate		21		—		—		21
Residential		22		—		—		22
Loan servicing rights		4,662		—		4,662		—

Assets measured at fair value on a non-recurring basis at December 31, 2018 are summarized below:

			Fair Value Measurements at December 31, 2018 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	$	7,242	$	—	$	—	$	7,242
Commercial real estate loans		29,125		—		—		29,125
Foreclosed Assets:
Residential		68		—		—		68
Loan servicing rights		104		—		104		—

Schedule of Difference Between the Aggregate Fair Value and the Aggregate Remaining Principal Balance

The difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of December 31, 2019 and 2018 was as follows:

	Aggregate				Contractual
(dollars in thousands)	Fair Value		Difference		Principal
2019
Residential loans held for sale	$	46,898	$	1,529	$	45,369
2018
Residential loans held for sale	$	14,911	$	475	$	14,436

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31:

									Total Changes
									in Fair Values
	Other								Included in
	Gains and			Interest		Interest			Current Period
(dollars in thousands)	(Losses)			Income		(Expense)			Earnings
2019
Residential loans held for sale	$	1,036		$	18	$	—		$	1,054
2018
Residential loans held for sale	$	(67	)	$	6	$	(10	)	$	(71	)

Carrying Amounts and Estimated Fair Values of Financial Instruments, Not Carried at Fair Value

The carrying amounts and estimated fair values of financial instruments not carried at fair value at December 31, 2019 and 2018 were as follows:

			Fair Value Measurements at December 31, 2019 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
Cash, due from banks, money market,    and other interest-earning investments	$	276,337	$	276,337	$	—	$	—
Loans, net:
Commercial		2,867,711		—		—		2,831,298
Commercial real estate		5,145,204		—		—		5,130,848
Residential real estate		2,331,990		—		—		2,357,341
Consumer credit		1,718,000		—		—		1,676,253
Accrued interest receivable		85,123		15		28,185		56,923
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	4,042,286	$	4,042,286	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits		8,828,881		8,828,881		—		—
Time deposits		1,682,230	—			1,692,569		—
Federal funds purchased and interbank borrowings		350,414		350,414		—		—
Securities sold under agreements to repurchase		327,782		327,782		—		—
FHLB advances		1,822,847		—		1,875,089		—
Other borrowings		243,685		—		254,519		—
Accrued interest payable		8,272		—		8,272		—
Standby letters of credit		573		—		—		573
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	4,302

			Fair Value Measurements at December 31, 2018 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
Cash, due from banks, money market,    and other interest-earning investments	$	317,165	$	317,165	$	—	$	—
Investment securities held-to-maturity:
U.S. government-sponsored entities and agencies		73,986		—		72,359		—
Mortgage-backed securities - Agency		127,120		—		124,409		—
State and political subdivisions		305,228		—		309,335		—
Loans, net:
Commercial		3,211,228		—		—		3,161,132
Commercial real estate		4,935,381		—		—		4,781,294
Residential real estate		2,246,127		—		—		2,225,853
Consumer credit		1,795,695		—		—		1,773,352
Accrued interest receivable		89,464		13		27,580		61,871
Financial Liabilities
Deposits:
Noninterest-bearing demand deposits	$	3,965,380	$	3,965,380	$	—	$	—
Checking, NOW, savings, and money market    interest-bearing deposits		8,360,313		8,360,313		—		—
Time deposits		2,024,256		—		2,002,187		—
Federal funds purchased and interbank borrowings		270,135		270,135		—		—
Securities sold under agreements to repurchase		362,294		362,294		—		—
FHLB advances		1,613,481		—		1,611,103		—
Other borrowings		247,883		—		248,065		—
Accrued interest payable		9,871		—		9,871		—
Standby letters of credit		525		—		—		525
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	—	$	—	$	—	$	3,115