ONB - Earnings call transcript Q3 2017

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Operator

Welcome to the Old National Bancorp’s Third Quarter 2017 Earnings Conference Call. This call is being recorded and has been made accessible to the public in accordance with the SEC’s Regulation FD. The call, along with corresponding presentation slides, will be archived for 12 months on the Investor Relations page at oldnational.com. A replay of the call will also be available beginning at 7:00 AM Central time on October 25th through November 7th. To access the replay, dial 1-855-859-2056. XXXXXXXX. code: ID Conference will and today financial of community. be participating members analysts the Those all a are this participants At time, in listen mode. only

time, prepared remarks. opening management’s session. turned remarks, will to the this over hold be call Walton Ms. Walton? Following Lynell will a we At for question-and-answer

Lynell Walton

conference earnings. Thank you, Bancorp's morning discuss our to Old everyone. Dorothy, to Welcome third and National good call quarter XXXX

and Jim are Jim Ryan, Moran Bob John Jones; Sandgren; Mike me Joining Moore; Woods. Daryl

from like third Before statements Old you to the I of our certain would future for the other results, begin cause of Slide refer may discussed. discussion X Please forward National's that looking that a and factors presentation full to contained factors. actual remind materially our some forward quarter to today well as of subject comments risks, SEC on that to uncertainties Company’s this could I results filings discussion as contain are those looking differ risk the statements disclosure

quarter XX.X% our XXXX. quarter or certain third results. understanding income As in on represents be as non-GAAP comparable only of reported net quarter third strong measure you the referenced assist X. should on Slide increase $X.XX appropriately I'll and referenced trends and morning, provided per over third measure to on to we begin GAAP performance and of directly these actual are This financial measures the income a included within review a non-GAAP $XX.X of financial call. most performance share. This presentation. Slide net upon the Non-GAAP this of million not will National's are Reconciliation results discussed Old for relied be measures measures financial X, the

higher XX% an yield the markets quarter. in grew basis portfolio our results positive of investment annualized during on commercial third loans to the as continues Our growth

book controlled grew of on non-interest ago. basis, credit cost over total an the well continuation from the and upward While X% also a our trend which pleased low also with quarter X% our saw grew portfolio continued year annualized value, expenses. tangible our We're loan third in

Another over partnership Pending note, week Sandgren. our recent Bancorp Xst. closing additional I'm announced in of with in most sure deal all you be file approval this the X-K conditions, to Anchor November last regulatory and our provide on other set Minnesota. Jim which close saw should I'll detail, shareholder approval we to the To now call customary on we turn of

Jim Sandgren

The growth $XXX.X our everyone. remaining for right results and right loan of our is Lynell, C&I. CRE demonstrated success in positioned results are $XX.X our begin growth. catalyst as million quarterly Slide quarter. very true strong my our at commercial the markets this in same third work. an in I'll category our Of growth, million franchise I'm to annualized in the $XXX.X was premise pleased strong the was growth, on loan side by remarks XX% X. you, market for good holds Fueled commercial stating by illustration Thank morning strategy the that last excellent of quarter QX say a the growth, and million well the for illustrated

of XXX% growth annualized on CRE, our note commercial growth that to annualized in C&I is our We're X.X%. was XX%. growth our standard While nearly centered see of quarter of balance to is majority reminder CRE year-to-date Also pleased currently third the was still modest our of portfolio loan capital.

our X% We remix continue annualized, decline in HELOC consistent strategy. to our indirect while balances see nearly nice also with some sheet growth stated portfolio to continue balance

economy these that I’d these well our Central like Indianapolis, are a attention Michigan communities. Wisconsin. among common growth few fueling National a exceptionally in of growth. is markets, sheet enjoyed The Louisville, brand is in and and a to business resonating denominator While we excellent Clearly, draw the commercial name vibrant Old to balance number our markets

graph the illustrates generated, CRE was quarter good The increase $XXX.X also graph was and XX% exempt in quarter. X, of rate left a C&I, a which the and to of were XX% loans, notable depicts XX% middle was large up commercial quarter. Slide represent the increase which that XX% to production yield, quarter. booked XX.X% as The our contracted variable our of on It’s that another in new tax that the Turning of year-over-year a funded result million very we compared commercial quarter production. the slightly second third third which modest for a and from loans loan

well quarter, as prior of QX in record at breaking rate loan of on generate us quarterly quarter quarter XXth, Slide to are graph at X environments. positioned this The advanced second in pipeline quarters remained total take consistent exceeding our growth rising this and our our final $X.X a our our September loan year. we balance which well billion growth. results, work full substantial hard are XXXX rebuilding with to to positioned shows on numbers two As down pipeline With the third producers compared pipeline of

Additionally, production Beginning call. bottom we in construction quarter. realignment sheet in bottom our desire direct slightly. diver graph, as for last you consumer quarters. solid primarily deeper QX illustrates you illustrates recent XX top yield a on on the right about strategy. can calls indirect even balance driven to coming from of see more future increased yield XX.X% residential reduce taking lending our in with on quarter's HELOC takes trends have into the opportunities. million on The over in declined the volume projects promotions growth should mortgage while advances slide our left this recent production graph category, with I spoke the ongoing profitable to advantage continued the The production outlined that $XXX.X help an the million $XXX commercial Slide boost by

down improved substantially. our has XXXX to see As yield this from XX.X% was compared can while you QX indirect our production graph, year-over-year,

we've there additional for -- product made decreasing improvement and portfolio, margin increase moving progress, forward. the good room and the size is yields While we of his already believe

revenue. to Slide revenue with basis, filings for approximately different second left business Turning and These of I'll the can occurred quarter look a filings attributed far management. to that QX on which revenue begin focuses from year-over-year be at quarter-over-quarter preparation $XXX,XXX The during and quarter on a at wealth second each year. fee-based the in the work accounted tax XX,

assets Our year-over-year equity market increase $X.X management. improvements primarily is in to to the million million the increase due $X.X from under our in and

up can third year-over-year. and slightly, our investments to that see quarter-over-quarter division, Moving you both revenue quarter was

brokerage have to transaction-based more fee-based more life We advisory our strengthen as from result model of drive to around also our planning sales, a which clients. and helped We've a which targeted model, efforts insurance a emerged higher transition relationships. for seen has continue revenues financial

forward to financial the I gain we model previous advisory further category slide on Slide into residential go in emphasize this results our We and referenced quarterly mortgage illustrates quarter-over-quarter appeared production on and revenue. the as on XX planning continue will XXXX. to the mortgage specifically our

QX. revenues, more mixed While secondary quarter, and impact saw third had to which an quarter essentially balance were the and compared we that versus production up flat the production was sheet on for market shift

nearly purchases. lower XX XX% in volume September compared which graph production in anticipated high Based markets. quarter. stood We our at million fourth a snapshot production in continue XX, new capital $XXX pipeline a on to for see of on September we the The refinances, growth to Slide on purchase home final seasonal of is was revenue

our rate by as loan swaps, our the as strong third driver sales production interest and levels we quarter of production. production continues year-over-year that be or of see can record growth higher than not doubled was boosted more this customer While to quarter, primary you derivatives commercial production. The second solid have

also growth outstanding his National fee-based exchange will in call well, in to our loan growth We a significant this and where franchise. that, trusted the area job now Old sheet exceptionally to resulting balance adviser revenue. positioning Wolking doing and strategy With Chris our team as Overall, as I market realignment continue executed of an our quarter over Ryan. this throughout another turn was business steady in and are see revenue Jim commercial growth we foreign

Jim Ryan

a fundamentals as primarily reductions. leverage year-over-year pre-provision X.X% was in banking underlying the in our improving focused business Slide core strong adjusted adjusted on as $XX.X credit amortization. tax that of expense pre-tax, changes help operating formats quarter-over-quarter made and Starting to compare pre-provision to result income and growing we to Company. previous The a income income future on We some you, grew of pleased million trends XX, see and was our by specifically adjusted on that anticipated you of pre-provision can Thank I'm identify better our X% respectively. Jim. remain focus report impact the growth well pre-tax, and the pre-tax, our

slide, year-over-year. on efficiency adjusted points our XXX basis ratio to basis points As and improved XXX demonstrated quarter-over-quarter

leverage, improvement saw and basis in improved points quarter-over-quarter XXX also year-over-year. We operating our over which

Moving net you see the graph of portion the the accretion well trend margin income. of to attributable reported Slide margin depicting interest our will XX, as a as to

an as just increased interest margin during X full non-accrual on and basis. on Shifting higher normal linked-quarter quarter in previous anticipated loans points. We the XX, XX do the quarter's basis from on totaled Further than a steepening for could points anticipate curve. interest expenses impact $XX.X on from increase. quarter basis additional quarter. both fund yield than cost interest X basis points Our basis non-interest Slide accretion million expenses of come collected higher the core points next not the basis year-over-year Interest-bearing were margin non-interest the and in increase benefited reported net the with deposit non-accrual income, slide the Fed to a basis rate from loans improvement and third X X adjusted from points the lower on benefit defined to

that our $X.X initiative. related As related million we you pretax $XXX,XXX our XX the and consolidation the Bank client anticipate improvement November to in of experience charges look to Anchor an quarter, partnership, related fourth will in occur to additional branch million forward $XX

referenced her in our common are and tangible continued XX, ratio tangible Turning common Lynell to Slide with as value comments, we in per book opening improvement equity share. pleased

Our equity X.X% per grew quarter-over-quarter book year-over-year. value share X% common tangible and

Our from final credits. the impact our on slide, anticipated is tax Page XX update an

income tax year-to-date displays of the million of occurred received volume. we in has column benefit the $X.X credits, from these all have which first The

quarter are of second fourth projects. display third which our the of The dependent and and XXXX timing full on year the columns these completion forecast,

of earlier we amortization anticipated in was the that tax guidance initial Our credit third quarter. year

We are that in quarter. amortization record now expecting fourth the

be including are projecting tax. after expecting at the also $X Currently, full approximately business $X.X slightly business approximately be fully will this net not CRE $X.X be investment the million. benefit year to $X.XX net importantly million other from will reflect We and does for deposits, impact loans all better to this and impact EPS credit. we to $X.XXX benefits income the relationships This are year. million from

credit to fourth tax benefit next have net to We and year. expect tax more the the the but XXXX amortization be in the distributed in XXXX business amortization should to similar expected be credit comparable evenly a quarter,

we the XXXX will projections. During fourth quarter, update our

Going benefit also lower forward, tax are we cautiously will under still sure rates. we marginal

benefits Additionally, any attention of to that pay tax turn forward. types of these going will credits close we over to the will now the call Daryl. reform could I limit

Daryl Moore

Jim. quarter. review charge-offs provision morning’s for start of with segment We’ll Thank the quality the expense call you, credit this and

in higher quarter the quarter last Moving were same charge-offs lower to net than levels. to These net third entirely the compared Slide those gross period second charge-offs in XX, from in posted the resulted were and in quarter. quarter higher lower charge-offs those year. last recoveries current than quarter XXXX Net third while

gross quarter. As charge-offs the in gross the in lowered second period than were charge-offs actually

in quarter we quarter, quarter XXX% giving quarter compared the $X.X a lower expense loan the The basis the provision quarter loan $XXX,XXX current recognized in was reduction equal our was offset a in the provision to driven of portfolios. our covered last by The a and expense $X.X need combined with for current $XXX,XXX the loss in XXXX. the than strong to roughly For for of million in more matching rates charge-offs on provision expense those in associated in million provision marks portfolio period. the were portfolio, the in of non-marked which growth by non-acquired mainly portfolio third the provision marked the losses

period. same average year-to-date which months basis of XXX% a For XXth, we at provision for expense basis net charge-offs year. charge-offs for even of XX% in coverage comparable of has year-to-date represents Current stronger been of $X compared stood loans that the end to X the points percent nine XXXX and September net X million, as last charge-offs net points covered where period

you basis ending points, period loans also a the the I totaled end which X $XX.X for of acquired points at marks XX While as of we on end million. would fell allowance quarter remind the current the loan to losses loans, basis percent that have of

move As see million $XX.X the mention of where borrower up first million Slide relationships, quarter, project, to in parties project Material XX, remedy the we can $XX.X we having plan of and the along portion project our using our resolution the continue commercial come this to special the longer increase loans are came are you issues. or in increased sponsor estate a liquidity to two being real XX%. a involved The to contractor the working project to to the disputes. with is and on move term

like entity the also operating to to guarantee, resulted year debt which service might relationship see million $X.X for that positive any than second in on category, borrower a historically a results one the the limited operating by posted results distributed are than end XXXX financial provided coverage less owner, one. is place those The to we not upgrade. fact credit cash Typically, mention than from single prior want we pressure business has little year weaker ratio borrower, its the an interim who relationship where except

a relationships $X improvement also On of category bulk $XX.X downgrade this to quarter, of the range quarter million a Most the this of $X.X were came upgrade accruing decreased as new this $X improvement other notwithstanding. came result in the $X million special category or the either this offs of of in We substandard loans downgrade of loans positive credit million note, the a category million despite our the result either number mention of results upgrades a in in more or from Overall, improvement the addition added $X.X relationships of of the fell million mentioned. relatively non-accrual, pay of downs. in came in just good, quarter. quarter Non-accrual the credit the that loans category million in the credits. as in pay I in increase to

to we're portfolio, underwriting Just last characteristics retail are terms of we portfolios. either To-date, In our continue comments time. cost ability in labor. manifest note, I’ll for portfolios debt this leverage. book, short our to a about clients turn the we've our retail any some going where Old burdens My basis. not efficiency might will is we we timely our seen talk remarks. personal change over a longer can period more but in the in given Bob in in from finding was or a and that our in not for concluding in inquired of overall importantly be a of operational than forward, whether belief the quality of they issue C&I is to product unique seeing us and call about labor hearing we'll of not and those regard, itself, With are but the you theme common the with be as to be couple National’s is managers on have applicants change inquisitive This this deliver only what seeing headed markets In in difficulty term. of our the comments,

Bob Jones

themes comments my out clearly with my that’s my overall quarter begin adding Minnesota partnership. Frankly, I additional more you, highlighting note be Indians, appropriate. and a to about our but Cleveland unfortunately, comments by Thank some a Daryl. thought would for on positive starting I our will I Great. shout color the not

franchise the do existing information growth built is perception of Well, pressure markets the truly most that rates. good be you think franchise words, that our the quality, slide, the clearly have the with see that its points our credit the last there you will also good positive by opportunities. reflective within When are see bullet have of the add a quarter and worth low limited This not lending is generated strategy a our repeat As will for others the To quarter. loan you our my purchase which quality supported communicated basic I element. are In This same the of cost on our the basic core deposits, we of and fashioned of years. morning. bank through the generated syndications themes this reintegrating of best. indicator overall of you on it’s markets at at loan like. or fundamentals overall over bank in key what my transparent, totally areas look not growth I other few looks growth, old loans. within Strong loan are

we the fee-based these reduced businesses Our continue in sales to have culture upsides inefficiencies as the areas. enhance and

on made progress work expenses, XXXX While on and in the that opportunities still We I client and team look that results elevated work substantial exist we expectations experience doing forward reporting of am have confident the beyond. the have program. I our are to Jim and Ryan that for

think positive we next for opportunities continue in dialogue our with the perspective they to about XXXX, we year. have fourth business clients discuss the As their and as quarter

XXXX. portion the is of see built pipeline we a our it closing to related and should While next that over expect months towards few and is into today, the down good

management. expense Fed of While be the rate somewhat are stage future the the of the leadership. our for greater rate only interest December of shape will A the potential and at expectation This on environment lack the in in in based our is focus its impact. myopic clarity important curve increase increases positive, rate on changes yield enhances

confident very to which announcement. will were our of start risk what fourth excellent client to charges do potential to mask know the an that associated charges for track had earnings. I the will We we Minnesota very turn quarter combination those Board’s post Minnesota, the earnings will somewhat we branch apologizing November be be pleased our our able will commitment partnerships. just credit reflects accelerated excellent associates our profile a This days have very we close experience project, with our and I noisy for close job operational clear our you. now is XX tax us. amortization Minnesota, of The As am on of prior Xst, and termination the discussion my making of record that will our expense by I with about to

While for quarter our we considerable conversion integration. leadership Minnesota led nothing still progress scheduled Jeff has is already been made The XXXX, second culture Hawkins the of short on incredible. have in the of by

never easy, in is Twin and is morale focus been our change serving the While their has amongst in excellent. associates their on Mankato Cities strong clients

of consistent we key been share. any charges expect not departures, XXXX has retention we to prior per team. $X.XX with accretion earnings with true key again been outstanding with Our our his of to and do no changes August to told in modeled we back and individual you have complement Jeff what one-time Their approximately have also what

of your savings question in am then those XXXX, expect what the with $XX have Minnesota in us. realized similar quarter and pretax the growth seen XX.X be we expected XXXX compared been savings Loan with in year, about XX% as of the end the million coming for reminder, that and to XX% balance mind is we still growth the third last as contribution third have cost or next fully has close. and For of I on of and the approximately is fourth issuing $X We sure conjunction will be in just deposits. to we X% the for with XXXX. shares core million partnership quarters approximately million, through their

right selective It other Dorothy, and deal. ONB seen another to not has not to the market In feel them, the do of price. at answer comments, do to right the call. acquirer. its up be remains those to for has the Books a we partner we’ll mantra will and continue words, be any we've your open to Our our but be brief we could changed. right and focus on circulated several compulsion With shareholders happy line? finding have be

Operator

first comes with Chris [Operator question KBW. Instructions] Your the McGratty from line of

Chris McGratty

balance the a question Just on sheet.

in what of size you’re be portfolio, commented put the the about kind in or but quarter? together of any your either that companies in of the in previously into doing we as thinking You've you sheet, adjustments the typically investment quarter. two come repositioning should the their noisy book, about How indirect balance kind any

Bob Jones

much you’ll I adjustment Yes. balance Chris. don’t sheet, in the know see

obviously, legacy the on going a the the -- to we to of forward we're that the entity, what balance run to on As for do quarter, continue have separate call the second conversions not and remix we we're we'll do to going go basis. portfolio

see than much different we I Minnesota. So, for don't you'll what bring know in

Chris McGratty

you Okay. And -- on for heard I the Jim. be then maybe if

to -- X out about the points at could basis thinking offset this? like should out On you accretion. your see maintain is which was looks How helping It can stripped incremental the should margin, margin? like we about be -- Your really the flat expansion? you margin betas the the some near-term curve, up in recovery. non-interest we dynamics you I but called we and guess, the see Or low,

Bob Jones

related to the don't deposit we rate going see price increase, and to respect we changes that. basis always X like priced Fed Yes, With continue to benefited the to anticipate any Fund the we've last quarter pricing, in points we're that. maintaining to

previously being markets the that in from our effectively about can So, we talked franchise we we control as benefitted price.

Chris McGratty

Okay.

of like kind and So base hearing, Is right? all you're I'm those that of essentially dynamics. if in factoring then working XXX a

Bob Jones

Yes. Perfect.

Chris McGratty

what's the to and quarter, fourth using there QX? think should last effective maybe but quarter, on but we on I And be taxes. timing, for tax we appreciate Okay. the rate? boil is the some then if effective I the fourth confusion what's one the color down the the

Bob Jones

full at fourth that amortization in rates credit Really, quarter. the -- year going I the could the think see of be all rate expense come tax there. you to occurs the lower tax of it's end listed full that the

think a that towards effectively I lower the the lower will So rate. end, good rate it’s

Chris McGratty

the To FD XX of that?

Bob Jones

Yes.

Operator

of comes question the Capital Jon line with Markets. RBC next Arfstrom Your from

Jon Arfstrom

to Hey, good a to the morning. Indians. give instead the out Browns of Bob, I shout said, you’re going

Bob Jones

Same Tom -- season my after [indiscernible]. to They I year got for the covered talk. tickets in last -- are just but I just seeing

Jon Arfstrom

Right. strong last questions you've had very would quarter consistent? pipeline touched is down maybe you a in more numbers, that's know just Couple changed, I you slowed of and on a but pipeline. detail from I like on just activity commentary bit? looks the bit, it has but the go Or say things a on it think that? it your I little the mean you suggest otherwise just could a --

Jim Sandgren

a of throughout pipeline. Yes, very, absolutely, direction, right Already quarter, the and so is still that lot loans positive. but moved no, a amongst prospects now more any accepted say with think rebuilding think just issues of is customers is just so. the into we would in still activity our just that’s Jon. commercial will great, of markets there any I the the spent pipeline and I in are among that RMs number I that our one and the priority But, sentiment pipeline. matter quarter say don’t there volume franchise is very in the our systematic getting closing our I

Bob Jones

and as folks. balance of color began they is it's expanded clients our highest the They little I want bit talk might on Minnesota report the sheet the our probably their some to history of add to just amongst pipeline a company, value been that of the opportunities. other the of Jon in

to by in continue be as well. we activity So, Minnesota encouraged

Jon Arfstrom

helps. Okay, that on Follow-up the margin. question, Chris’s

healthy. was your on modest bearing also deposits idea what you and Just and growth the there just saying very It any a like going also what’s cost? give are deposit an non-interest just on pretty increase were bearing it pressures? looks non-interest But

Bob Jones

product. really Well, the DDA non-interest sales put Sandgren team and retention focus they I to the on think his and testament of with growth Jim is our

see that start in to without total you franchise it So, times share again markets I if more in market run when have and we some where you like right as growing competition flat specials In sales And just better offer. a changes up, frankly quite this of has not to ours keep you these got generate slightly better these impeding products don’t value move cost. where to think in the market, can and get can -- because that costs of overall lot of pressure you dominant and focus when and right markets now. strategy do to better you you that deposits think few having been the like deposit can vibrant we feeling anytime and have I we're we're soon a deposit

Jon Arfstrom

any Okay. going? how closed And expect on are slippage so deposits? I few curious far, know you've expectations closures? your surprises And the or any from branch the so what that’s

Bob Jones

of calls and get communicated. judge it by Jim's number so in I I they closing. but track record We've excellent. me one XX the to branches -- should let speak, Jim I call the were Jim's far track had is record that always

past. we've consistent pretty So, retention we’re what to I’m to see done rates the confident continue going in

Operator

question comes next Terry Your of McEvoy Stephens. with the from line

Terry McEvoy

million quarter the just expense these connecting in to I three million thoughts? line? two, and And of correcting terms I ago back expecting now One, look that the $XX to three X.X occurred -- fourth you about were on so the if quarter. that happen clear, of third the credit expect million from months you to ago, line. the increase the investment First just in charges I'm expense months question run None tax $XX the of in impairment am the why

Jim Ryan

Yes.

correcting to get construction forecasting. can projects certificate little And a of It's historic with just occupancy So, move your The you we we're challenge complete, when bit. all around be a these projects. building you're are having construction seeing timelines assumption. is the of that are is going

as that the anticipated. been growing is and that, projects we've into like terms so and out hard look we higher, In and more update we why of projects future, the actually originally business at work than amount close actually feel have we’ll

benefit. higher So amortization higher credit tax the difference the after that’s and tax in

Bob Jones

$XX amount interest of think core we about got just got business That's generate excess you add probably pretty but business, in is, a lending Jim of that this in don't net fair. in million and alluded I that substantial see well. deposits income, an to comments relationships his and we you what's that as as cover might comments, business as to we've Jim's well to

So, better is see you that page. overall the profitability than on what even

Terry McEvoy

were feel XQ any yields that you. And you out, and one was Thank for the to loan, yields then you if mentioned I production think back production XXXX? there quarter-over-quarter, specific down XQ loan relative

Jim Sandgren

look second basically did and quarter. be flat from Yes, it'd Terry. that at We the

XXX So, were number yes. I think where we that is playing,

Terry McEvoy

And just question. last then

look really for I from cost could the simply offset and deals, model As success on line. the sales the accretion XXXX, having you're provision the my what at the

deals? line portfolio? of just do and and And reserves reserve had from just there will of the creates any And have What provisions take so you be type it wondering, as past to loans they and on the you to non-acquired relates XXXX? for headwind kind Anchor they’re go into as provision then re-underwritten that then marked in build I’m moved think the any

Daryl Moore

culture seen Minnesota forward. marked this. Daryl. associated build Historically, just change Terry, We this We're any the there see is and as it we provision been all. not got that the with not an and in credit has think at have issue, managing given appropriately going don't anticipating we've any up I and

Operator

James. from with the Long next David comes question of line Your Raymond

David Long

in when more the think you as the going thoughts see we closings the excluding transaction. with XXXX about after rationalization opportunities there the Any back half of related more was consolidations branch and where integration to forward Question Anchor to Anchor? completed or

Jim Ryan

balance Minnesota any say continue look does a branch looking we now, as franchise to be at I franchise, got terrific will determined. in job closures that think there'd Jim to didn’t to said, safe disappointed if franchise. we a bottom we be whether have continue But publicly they've to at the think look Right we in more XXXX. we It's I our our great of XX%. at

David Long

better had geography in the keep to deposit may you guys to able secondly Okay, got worse deposit any on it. relative to And color where or had quite you then been as that particular betas rest? have related low. have Any that -- beta

Jim Ryan

markets, creating a in it's issue, be some getting next we're those Instructions] create growth of markets the run Your you our Lyons. question comes [Operator pressure. not anything. from And nice and we’re right we’ve not Operator of specials where leader of the some again, Hilliard line in really any now to with Stapp higher couple actually but No, Andy the

Andy Stapp

were bit moving item provide a this fees in linked there us quite market any color line to going can down quarter. Is help forward? you Capital

Bob Jones

business question, a fairly immature for Great That’s Andy. us.

Andy Stapp

Right.

Bob Jones

the of some have And ability erratic going deal. larger length still and as of you're that up you build the to earnings

use we can So to run a color and that hope after quarter, more fourth we’re give more the where not so in Chris they you job, our franchise. number a say I'll fourth an doing from about even type to because throughout is the build opportunities I have and to am I quarter you second that other would sure might you and give But rate optimistic really clients excellent XX little in there. than to than that Minnesota tend for haven't product get be -- of our up the quarter

by… little apologize business immature again fairly the we it’s a lumpiness, So, but for one bit of

Andy Stapp

Yes, completely.

Bob Jones

would we quarter the probably very I just in large, quarter Andy, And happen. transactions had that couple large of a add that second in won't

like compare the but quarter, good the was third a to you So, a felt really pretty when quarter in second. quarter record we

be but strong. to fairly commercial and So again, rate hard guidance, production given to continued continue the give environment should

Andy Stapp

the a questions Okay. were items charges that on couple much of housekeeping consolidation correctly And occupancy? all just non-core presume in pretty expense branch the the

Jim Sandgren

was in occupancy line obviously side. bit the be and the as will a little then Most the quarter, There severance a well. expense severance those yes. of bit of little For

Andy Stapp

regard Okay. client costs, to And initiative with are guess some I then the fees? they experience -- professional initiation at? in where

Jim Ryan

at fees professional stage, Our this Andy.

Andy Stapp

that? What’s

Jim Ryan

professional this all fees It’s stage. at

Andy Stapp

from the that’s right figure. Alright, Okay, it me. that’s

Operator

of Your comes next Nathan with Jaffray. Piper from the question line Race

Nathan Race

question Bob, program. just experience a on the improving client

just investment, seems would on nearing kind you that of characterize tailwind investment of how this curious successful kind program? the it we're As of the

Bob Jones

also bow a us help and are share overall we At be in allow get us Board, the you. some glad under a who them to we we that deliver. feel our show XXXX deliver, And say comfortable score. and in around results, the have prefer I investment saying we'll have still the Yes, how with get overpromise a culture from lot of my to would I going to put come on that promise to is desire actions. that said, the name I with little is our as under as those in that of unlike very this project and considerably stage, the we runs scoreboard, and very, we think we can’t that And clients where a I so as from always And tight much serve you you over theories cute reduce made on not and we cost. lot I to Browns,

Nathan Race

closing? Fair XQ for enough. the with Anchor still confirm And conversion just the to despite scheduled earlier

Bob Jones

we as our and major two EMV card system involving August Yes, mortgage projects, our the in call, got we've is said technology the one one other conversion.

clients is to just it our X. new not we'll put put Minnesota desire painful our through up So, in as process to

Operator

Your next line FIG the of John question Rodis comes from Partners with

John Rodis

expenses on question to last expense. Quick the still quarter’s included about I guess credit you good $XXX felt expenses tax for $XXX on full talked you year. of this about that million, call million year guess but I

that to higher towards So of I than assume You fair if the in right million, could that is tax end the way guess, range? is expense about think come it higher the comes to credit the in it? $XXX

Jim Ryan

about think tax amortization to tend credit separately we from operating those Yes, really our expenses.

plenty that’s disclosure so, of why try that. around we part And to

higher tend year. and purposes think to you the full we of about run for that question we how as about for those think incremental a we But, that about think back your think to separately amount I total So business. gets the

John Rodis

Jim, I'm So, make hearing you, just to sure right.

about tax $XX way right So, million. $XXX million, going said feel excluding to the basically you’ve million you $XXX $XX Is $X $XX million that that million to credits to million the from in still to good it?

Jim Ryan

Yes, I those would quote just numbers look at that higher amortization. That in. differences to and you that added

is reported your this originally numbers comparison. apples-to-apples going in amortization XQ to back XQ to total the to those add that just we're fact get have going expected we and you’re we that and higher to So previously

Bob Jones

as I higher it's have important going But from think we're also well. realize, to businesses those to contribution

Operator

There time. further are questions no at this

Bob Jones

your she all quarter. to attendance. Thank you fourth will to And you thank glad for provide as Lynell how I about Great, look talks be always, any you. forward clarity, and our

Operator

available call. be the of will on concludes will code: your This page contact This oldnational.com. anyone of XX months presentation dialing additional has Xth. questions, for with XXX-XXX-XXXX. you ID XXXXXXXX. Lynell Relations National's again, by today's X-XXX-XXX-XXXX. Old Old The replay be replay call please slides be call. Investor Walton at website, participation available Thank will a November A in along the replay also If conference conference available through National's for Once the

Old National Bancorp (ONB) 24 Oct 172017 Q3 Earnings call transcript