OLD NATIONAL BANCORP /IN/ Q1 FY2024 earnings call

• Partnership with CapStar Bank closed on April 1st, expanding the franchise to southeastern markets and accelerating growth potential, with CapStar to operate as a division until third quarter systems conversions. • First quarter GAAP earnings $0.40 per share, adjusted EPS $0.45, driven by above-average deposit and loan growth, stable credit, and disciplined expense management. • Adjusted ROATCE 16.7%, adjusted ROA 1.1%, adjusted efficiency ratio 53.4%. • Total deposit growth 5% annualized, loan growth 7.5% annualized, year-over-year deposit growth 8%, loan growth 6%. • Tangible common book value grew 2% Q1 and 11% YOY. • Introduced new Chief Credit Officer Carrie Goldfeder, and Interim CFO John Moran with experience.

GAAP earnings were $0.40 per common share for the first quarter, with adjusted EPS at $0.45, exceeding consensus estimates by 5%. Adjusted ROATCE was 16.7%, adjusted ROA was 1.1%, and the adjusted efficiency ratio was 53.4%. Total deposit growth was 5% annualized during the quarter, with year-over-year deposit growth at 8% and loan growth at 6%. Tangible common book value grew 2% during the first quarter and 11% year-over-year. Deposit growth allowed organic funding of loan growth, with total deposit costs at 201 basis points.

• NII expected to increase in Q2 with CapStar inclusion and continue modestly in back half of year. • Assumes three 25 basis point rate cuts, terminal beta of 40% by midyear, non-interest-bearing deposit mix to fall to 23% by year-end. • Guidance updated to include CapStar close on April 1st and purchase accounting assumptions, unchanged overall.

• Competitive deposit environment could impact deposit pricing. • Potential frothy pricing in certain commercial real estate geographies could affect lending. • Uncertainty around rate cuts and their impact on NII and deposit costs.

Q: Discuss deposit pricing metrics, competitive dynamics and comfort in lowering rates.

A: John Moran stated it's still competitive, on offense, costs abated late in Q1 with March deposit costs at 205 basis points, spot rate at March 31st a few basis points lower.

Q: Loan growth, demand dynamics.

A: Mark Sander said loan growth came in above expectations, C&I clients solid, construction book providing tailwinds.

Q: Growth potential, credit, CRE.

A: Jim Ryan said open for business, potential to grow faster than industry, no penciling down in products, CRE volume down due to market dynamics.

Q: Loans subject to refinance risk, multifamily trends.

A: Mark Sander said manageable level, $2.8B maturing in 18 months, stress at 300 basis point cushion, multifamily in markets holding up well.

Q: Deposit growth opportunities, non-interest bearing.

A: Jim Ryan said in all lines of business, close to bottom of non-interest bearing deposits with March showing growth.

Q: NPL progression, operating expenses.

A: Mark Sander said NPL increase due to three credits, operating expenses well managed with mild winter in Chicago helping.