ONB - Earnings call transcript Q2 2020

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Operator

Welcome to the Old National Bancorp Second Quarter 2020 Earnings Conference Call. This call is being recorded and has been made accessible to the public in accordance with the SEC’s Regulation FD. Corresponding presentation slides can be found on the Investor Relations page at oldnational.com and will be archived there for 12 months.

Before turning the call over, management would like to remind everyone that as noted on Slide 2, certain statements on today’s call maybe forward-looking in nature and are subject to certain risks, uncertainties and other factors that could cause actual results to differ from those discussed. The company’s risk factors are fully disclosed and discussed within its SEC filings.

contain which slides more believes certain comparisons. appropriate addition, non-GAAP management measures, provide In are assist intended performance measures non-GAAP These to trends. investors of understanding the Reconciliation the are numbers, presentation. of for contained these appendix within remarks. the I now to for like turn would conference to Jim over Ryan opening Mr. Ryan?

Jim Ryan

Dorothy. this finds Thank you Good all healthy. I safe families your and morning. of hope you, call and

Infosys. including are technology the ONB of pleased ongoing the implementation our with We regarding strategic our our initiatives, and partnership announcement second with quarter results recent Way

our return the key slowing to workplace admittedly number reopening begun increasing cases the have our We of are bringing our transition are the across members including to down transitions we lobbies office, as our and positive our footprint. to back but

includes income for to billion growth. due all End estate of details. primarily provisions the credit loan period commercial Brendon at higher net on clients on clients, safety our million increased million Moody's our Our with Starting lobbies remain communities. the was our in open in and $XX.X consistent in team expected hard of and Way are dedication forecast. communities this like and loans charges. by you focused and health including million team Adjusted provision in members economic unfunded $XX.X $X.X for quarter environment. of challenging the after losses we which fill million to was will $X.X second These and million $XX.X $X.X serving members, tax work would in provision funding ONB X, and are commitments. also I total recent most real Slide their thank for net and our committed with PPP and income

lines were to Mortgage spots. proceeds billion impact PPP growth was loan strong unused higher interchange due service slightly rates rates. PPP offset was continued increase XX% bright savings credit. income Line capital related offset and by Our Net to dropped to deposit utilization higher exceptionally income PPP lower and revenue Core from than funded commercial in higher in income. interest of the million, charge payoffs new line $X.X the in which markets of an deposit lower first COVID interest quarter. and of production, $XXX excluding production be

We initiatives. we expenses to continue achieve as on execute ONB lower the Way

Our adjusted leverage XXX was operating basis XX%. improved efficiency for ratio the quarter by almost Year-over-year points. under

completely our better credit programs improved and and ultimately quarter, underwriting during and Our quality metrics loan the stimulus portfolios us the but appreciate we crisis, help believe the should will impact Midwest don’t footprint course. of we the once run weather expect than deferral losses practices, the but depth their still grander diverse that We most. strong materialize historically

stress forecasts various tests. We multiple Board share of Directors our to economic and continue with

As capital a other don’t expect we and current to actions result, anticipate we our maintain any dividend.

open the we and business manage new We are extending are still for long-term. We credit. for

Our balance markets and sheet strong. are capital

other this side. am diverse and time. we will the even stronger confident team our help emerge that markets challenging through are manage us Our I on will experienced

announced with X, update to partnership Moving recently Infosys. to Slide on I our want you technology

partnership need financial As our technology current examine from ONB benefits and only services experts strong increase a development those us our multiyear for the investments. fund infrastructure, we improve partner hired accelerated innovation. investments investments a the those investments help opportunities infrastructure, part and will our in and technology talent. outside to increased to This accelerating training and help required technology of recognize we technology maximize Way us the The for are

technology the greater experiences Not scale provide and our only Infosys information leading will enhance even significantly that and they client are effectively. the in I'll over is bank global of over investment confident XXXX a state partnership We grow turn Daryl. time to training now are in this and U.S. our to efficiently with the are million plans Indiana center company, their workers Indianapolis. building hire to also call they making $XXX

Daryl Moore

my in of $XXX vulnerable of borrowers represent the current especially total economic level identified where that begin and are if industries. we particular will power outside our instrumental our raise to going top regard is can these all this imagine pre-PPP access to in forgiven we believe loan X.X% segments the loans. six which segments, in equity that staying criticality each the noted, of this of in into assisting capital capital the the contributions crisis. of of our correcting that I of Slide Therefore challenging vulnerable borrowers X% also of outside six XX% Jim. vulnerable to just portfolio. are PPP of to the is for that capital additional downturn, extent very total borrowers, but shy none In environment to loans these to of determining have just presentation our commercial with approved X segments believe it of having we these be ability industries industry see needed. not we be exceeds through of assessment note borrowers they on the are million portion outstanding half of to interesting the to borrowers represented segments in identified over sources that morning's lay the exposure that our and loans loans your you, of the most to injections brought will these vulnerable the PPP respect the industries Thank what of these We you out a exposure the of of this total total factor these critical only With capital regard, navigating

extent continue what the to portfolio structure pre-COVID rate could service strength current obligations of We debt the on capital, endemic to those liquidity, ability as the their for the and work to our in through impact baseline areas borrowers to a loan understanding borrowers.

use of that have as view through appropriate. of deferrals based year, months. from four given are will on in further moratorium had With our and provides for results we FICO of proxy credit portfolios performing X, bottom we relationship the these at product last as exposures receive the average or first quality of on of to inform portfolio respect actions and As scores. level those a take the than are to weaknesses individual Delinquencies did interim retail of that whole half guarded around underlying Slide each begin we retail we granted the chart the fact the repossessions side understanding trends in and but the information strengths to a very our of most and losses they some our loan borrowers payment in better information financial the

and Moving each roughly to Slide that consumer information portfolio. of more deferrals the book on X% X, deferrals an mortgage deferral on to entire commercial portfolios showing have we provide our equating on on XX% XX% and we residential booked of the rate

ensure deferral extension have spend requests to beginning consider are a requesting we deferrals. and capital, bit time any consideration First just analyzing baseline than information to liquidity of any did to the requests in XX-day the that end use the requests we strengthen structure time can deferral we credits loan will the opportunity of trickle to now concessions. a on To window that serviceability we opportunity extent use and extensions, debt slowed have we to of earlier where on front will period I this and first more of extensions round to mentioned further

to we report Slide bottom half we're of to in that XXXX over billion $X.X of to Program X, Moving loans have Protection pleased borrowers. in excess the extended Paycheck

process see or spent our of extended that of bank as If focus. less up has the forgiveness with category been fell affirming individuals building the the position a can this a points you entities almost for X large those $XXX,XXX day basis chart, the levels XX individuals from a team requests. XX% hours or open least were metrics. Slide for and size loan significant will with have be these PPP community loans There seen to to ready [ph] in organization. quality XX client credit an is at overview to SK delinquencies be years On provide by we to relative receiving utilized at once XX+ which our of not loans

XX Net it Protection what charge-offs with helped to final result million basis fell might in seen were to decline in certainly have charge-offs is borrowers levels. important mostly payment as relationship systems but Net critically the slightly balances, due Paycheck slight seen at keep net have Slide to this charge-offs forward. small quarter in increase loans, to to supplements, absent Program. more mind delinquency average down any associated this of of assistance. might of In payment X It earlier, that impact on form any or loan points the in fell is historically delinquencies period $X.X mentioned have a loans. quarter these basis part going rates programs the PPP loan the damper historical Non-performing non-performing in a section loans normal the we increased the in we I've more than points deferrals As non-performing in and to look X, of a of loans. of SBA balances yet be in wind

our significant particular and increasing call peers National you the somewhat difference it metric. With that, turn a XXXX over on XXXX to the quarter this fourth quarter see due Old first higher to losses, While and Brendon. comes trend when can between to I'll

Brendon Falconer

Thank you, Daryl.

to would for quarterly Before of financials, we to overview like an credit turning provide the losses. allowance our

assumptions $XX unemployment forecast sharper increase updated in a the our first the prolonged Our were projecting initial the million driver GDP primary is model and is of outlook again This baseline assumption. Moody's quarter reserve from quarter. to now this compared economic CECL higher derived which decline

Our current at stand basis ACL loans ratio including XX points. PPP to loan

our that addition marks continue allowance to million would on I ratio $XX like to in credit remind loans. also unamortized XXX our points. acquired to you in carry PPP the portfolio Excluding these to would from loans, basis be held loan allowance we

charge-offs, and in will The effective [ph] the mitigation margin marks on an While through near-term. resolution. relief have programs stimulus these offset credit mark any will been remaining accretive losses directly for not fiscal

there reserve outlook the the could in losses needs. the However, a the estimate health impact to the future today. which our and cap economy, still reserve of economic regarding the government best our of long-term current portfolio is all credit of of the said, uncertainty deal future reflect levels is That great actions, and virus,

our and on related per our share adjusted per Turning $X.XX GAAP to Way share million earnings the earnings excludes ONB Adjusted charges. earnings $X.X was $X.XX. per in was quarter Slide X, share

as Moving net expenses and was the Slide rate improvement leverage in Way period well from initiative. good This points as by X.X% driven due ONB execution resulting our quarterly pre-provision businesses and our billion $X.X XX, challenging we led Slide and with XX decline quarter averaged in to billion. Despite operating by in the C&I excluding year-over-year trend increased loans Commercial revenue earnings to down basis prior reduction PPP $X.X $X.X of improved pleased increased by impact were estate pretax, The outstanding for PPP which XXX was shows at loans higher portfolio new income the quarter. X.XX% operating X% of and short-term purchases were business and adjusted a over was capital quarter-over-quarter while X.XX% lower XX% period pipeline million in the to million adjusted $XXX are strong with full we mortgage PPP loans higher yielding year-over-year. rates interest PPP markets end mix. excluding $XXX loans Loan billion asset End an which of environment, fee real be continued down total in net a to X.XX%. with excluding utilizations. yield X new reflecting production X.XX%. quarter-over-quarter Commercial points totaling grew to increases of coupled revolving yields line activity loans. of rate annualized basis due rate the

Slide remained at to XX, a loan and for end. book significant deposits and on quarter funds Moving the deposited as average during amount the increased period the PPP were quarter of

increases in this a rates also seasonal bonds. savings well benefited increase public from as in While broad as

deposit a XX points low from first points total qX. to in declined the quarter Our XX to cost in basis basis

While complete. we funding to continue most reduce to of opportunities now our cost, look actions are planned for rate

deposit of XX Now next results CD the quarter a in points basis deposit client X.X% deposit the we within several our pleased majority expect reprices fell trend we core to are that base. has with costs reduction Overall for to strategy meaningful in and while costs continue as months. XX maintaining our the our of book this resulted pricing

margin. on contributed income Net and in second had our will interest launch was with changes expectations. net to and PPP income in our impact Next basis declined point margin quarter-over-quarter on Slide margin. basis X interest interest you approximately $X interest the negative a XX, points quarter detailed line see million generally corresponding net but XX

loans by to were the X.XX% were down X.XX% and interest The yields only which in Excluding reduction in was compared impact offset of both net XX asset partially QX. PPP points core basis in in likely point accretion margin funding as earning lower in XX XX in this Slide reprice costs. continue long-term basis trend reduction assets our earning will margin rate adjusted non-interest income. This our shows trends margin.

million the representing from in the category. interest and adjusted over improvement attractive of income pipeline was quarter. line a primary note rate $XXX,XXX our against production business. mortgage very quarter to with million third take QX XX% $XXX has which remains prior $X The QX The charge that increase mortgage portfolio a Mortgage Our non-interest spot our and driver business $XXX second million also bright the capital heading market increase million $XX remained a came $XX quarter. were million impairment quarter a swaps represents increase record our into as purchase XXXX. netted from a Mortgage over over MSR in clients. we million $XX The $X revenue. continue coming this an prior was the QX did million Please to of strong to revenue be

the value investment lower seasonal modest revenues. wealth did this Our both impact the equity credits trust negative benefited on from quarter. business and a have tax market The

expected, fees local prior rebounded it also down slowly QX, ball under the point in significant overdraft reopened. bank quarter, quarter presenters. from by mid [ph] decrease accounting Interchange million to in its came As $X normal to compared and driven income were pressure with returned but nicely

shows the focus $X charges which XX $X down million adjusted Way million the expense our management. we quarter were Adjusting projected. than credit slightly ongoing on Slide and quarter-over-quarter. these expenses $X.X noninterest which is was amortization, noninterest million this in ONB charges Way Next trend for ONB reflect better tax expense

noninterest basis in point quarter Our ONB noting XX.X% quarter in FTEs. Way unfunded reduction QX. XX% a that allowance represents of reduction in a second $X.X million. year-over-year efficiency for expense of a for XX% expenses our was Oyr is initiatives have commitments and resulted low included for and Also increase in our year-over-year the worth adjusted branches ratio an XXX improvement

are wrap my some on discussion I up quarter, takeaways. key here As the

We business overall our are pleased the with was as production performance our solid. of fundamentals core were strong. Commercial

be will asset average marginally to an our two-year and PPP will loan coupon reprice through and a rates also commercial near-term. us, on investment yields but net level do margins impact at impact largely pipeline, These accretive lower and short uncertainty curve continue sufficient now over carry CDs with mortgage may reprice expect to quarter borrowing our our of Lending the and fee well, yields. loan loans promised loans businesses in end will portfolios the a Slide XXXX. will and historically our put lower capital pressure as behind on remainder interest thoughts on but we our markets Way delivered healthy on a Our ended terms. maturity, costs for as fee continued asset to billion and savings perform ONB X% in of coupons. in the we X%, our declines but outlook the growth approximately margin lines, strategic offset move $X.X impact yield we the pull-through XX on particularly not going the this outlined long-term plan. to will economic be forward. continue the includes margin is of rates their to We and expense The

come is loans remaining the also we to As payoff from begin under likely immediately. are will items to income year. uncertain, forgiven, key significant be The any this fee until forgiveness timing pressure accretive will loan don't but Several economic of expect slowdown. still late

market pre-crisis investment down seen than we the were revenue fees management management in some half year. have the The impact subject of to valuation mortgage to declines time and in be more will in a the of Overdraft sharply that in wealth businesses recover and our may assets back quarter, decline will proven near-term. still has Our under take to levels. but the typical resilient expected, the seasonal the

We adverse in accreted are current one-time believe a would also partnership quarter at XX on capital to We that our Infosys continue will an quarters. this year. also test infrastructure slightly the ONB and our additional earn ahead a position capitalized you the have capital several expense of points recently remain We've under stress update give capital, we outlook. savings model, to the $X our million also over at outlook the expected our large and is now scenario, [indiscernible] approximately generate next out and of point and horizon. we recognized we would of healthy CCAR in charges to XX.X%. the Way reiterate will severely I our dividend. our planned nine-quarter portion updated associated earnings, well basis on and an in on promised initiatives be We based lowest levels, the XXXX with and The like upgrading current IT realized

low to Our we security liquidity, respond sources flexibility unencumbered liquidity also funding loan of position, XX%, to future needs. cash position remained to deposit plenty of various our strong, and very have with strong and ratio of

full provided XX% be approximately GAAP we an and a basis. is on XX.X% year which guidance to our FTE expected basis, on some have on rate, Lastly, XXXX tax

end. of projects year. timing Those recently the tax additional the we be will we're quarter. As be are Jim the other could projects including amortization have COVID-XX and Sandgren. credit that, previously placed caused to in barring If any credit corresponding take that by and we projects the and QX, happy we completed anticipated full answer tax may here we in in delays, tax by service delays this team restarted year questions that our project have projects will completed have impacted you full With reported, do benefit have that historic

Operator

from with first Scott line Piper of Your Sandler. Instructions] Siefers question [Operator comes the

Jim Ryan

shock. Scott. a What Good morning

Daryl Moore

Scott. morning, Good

Scott Siefers

credit the of you know Hey, you Old reserve. feel but reserve factors just I history, know well well the given to wanted the I just such numbers I is area looks Hope just were the had what reserve enough up guys question sort any solid or appreciate thought to like are have guys the as on one mean qualitative to excellent to the I guys question. the in only understand loan and have level? you you the the nuance. got might doing ramping morning. you you ratio. uncertainty perhaps say of good the to that light outlook appropriate are just taking a this the ask course National on and I where But you

Daryl Moore

Sure.

build obviously and additional accurate the that really, models trust forecast comfortable the historical our provided. stand models based but run the and forecast given are Moody's results reserve given that we appropriate we year, Moody's on model So we to I really will the feel that with we baseline where say and some did economic our reserve also through qualitative add this economic Scott outlook. the levels

Jim Ryan

provided stands the appropriate portfolio, in diverse granular an exactly management Scott, answer given with of where reserve right you and kind we the think what the amount, comfortable of the we've board are know history today. this the very nature of the so our and our to nature hard environment of portfolio, know, is our and portfolio it's

Scott Siefers

Brendon, add credit none gone Okay, just credit are, color. us I they really, additional guide the to I touched with great? maybe, your mark, you what has in that but that extent marks appreciate since of could a cycle way think, of through color then credit sort your perfect. absorb million indeed to And be is just available would it I think you prep is $XX any remarks, loss? on

Brendon Falconer

the those off And credit that to accrete need it event help specifically the in if will charge through Yes, a earnings off, the as if accrete period, mark marks in we allow available forward. loan is and go but will loan won't the is accounting are the although and that fund different. credit we straight geography will the earnings that to we you on to offset be charged resolved, books provisions

Scott Siefers

very Yes, right, it. Thank All perfect. guys much. you got

Jim Ryan

Thanks, Scott.

Operator

question next of from Your comes Chris McGratty KBW. with the line

Jim Ryan

Good morning, Chris.

Christopher McGratty

with you program, everybody. a outlook morning, of Brendon, PPP of and couple then just on looking questions. good start Hey, couple if for numbers I the a could

remarks average fee. I the to What's X%? in total the are prepared said the aside think yet total? you What's from realized fees X% your be that

Brendon Falconer

taken just shay left be it's of So million. to million accreted, $XX about $X.XX

Christopher McGratty

Okay quarter, and you loans do and so, that? the of have the balance the average PPP in

Brendon Falconer

loans… have average sorry – average X.X The of the forgot balances, for don't current the balance I I portfolio? billion, average that oh the

Christopher McGratty

So roughly guess, the, the cadence in revenues that would think PPP, I you, the I the $X we total do most if of the of from million quarter XX? X%. of about do I What think think be how you of said that

Brendon Falconer

$X.X We're the our to we we that took be to as was process much with and a roughly this get the love borrowers. Jim in between we'd - has coupon of as split into Sandgren and can. proactive XXXX quarter Yes, million fees

expenses, I but so to a gives is these, our submit Obviously, fourth we're behind the that anxious and more thought we're a think they're but the extension until income time not as to a to little well, beyond get event. allocate us FDA all is an eligible there's quarter sure, them uncertain. to way best and this this

Christopher McGratty

or of trajectory question a of the as deposits? assume viewing Okay. deposits on one-for-one stickiness PPP, you you until we then those, last can surgeon and speak the it, with do to the how loans the just are that those the run of are deposits And the associated kind

James Sandgren

quarter hard being they've provided. start reasons balances as in that is Yes, used to Chris some I for run certainly they're It's the those see Jim. been the say, you'll down this but of assume to would

balances to in but those hard I started I reduce think say we’ve - quarter. seeing should the So one-on-one,

Christopher McGratty

I'll you’ve and end think I environment Okay, margin group. was out. my it If margin, take then about just basis not the the last great being one, nine the of pressure we've felt of see short you pressure because points it? Do the year back because of of in the, the we now compression. or the I messaging just, core, assume lesser Brendon, around talked should the end the degree quarter? being similar we jump a that long for core is half the Are that and

Jim Ryan

continue some associated to $X.X point will The some other going half question. Chris, Yes, for next with was PPP PPP. billion the appropriate, of we then near your think see maybe from quarters, in I next similar roughly the longer couple up came at build for is think prior downward just the forward. And think flatten there, term I it several to time curve of increase this but exists, deposits begin - to I and pressure trend from probably but one will the

Christopher McGratty

Okay, that's lot. helpful. Thanks a

Operator

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

Jim Ryan

Good morning, Terry.

Terry McEvoy

Maybe portfolios like just made at Could the housing? remove add X, and you've about say the to put like, few how kind senior the in why talk to last loan ones those of over second senior few of start three came CRE you new looked as with you housing. months, you decision and Slide a the transportation guys them vulnerable industries the out changed kind first from quarter and quarter, a question were a describe on

Daryl Moore

seemed on, right this we transportation out talk that segment, the The put box, be is a because to Yes Daryl. of lot of transportation. there about Terry,

looked an hauling region. within or at hauling hauling most we that our portfolio, back As either transportation short-term went is individual and in load of exposure

just didn’t there. we much So see deterioration

we before portfolio, It’s which and assisted and so housing particular into out, costs finding a you crisis, protocols. thought, before with difficult industry. this of we little that if pulled just we living with struggling just because bit lots to showing about our at crisis. looked difficult or of the As industry, been price weakness, there’s of think it’s employees bring that to senior They the new up COVID the clients also And increase COVID. the associated were different just

really you on So we our need just keeping that. what, know be we eyes thought, to

so was of you we might give just thought it picture where And going better our swap vulnerabilities two a those appropriate to be forward. more out, to

Brendon Falconer

Terry, in feels leadership and portfolios so of we can an sure that lot team spend an through the on awful disposition, there’s lot time the of entire potential managing But I'd those time making portfolio at as goes tell it as focused current good you, about and, good, been today future do downgrades, any awful looking these this credits. credit-by-credit, appropriately. we we’re

Terry McEvoy

follow some some back closures Thanks. been how mean, out charges Anyway, weakness And it interchange the opening taking thoughts fee now there’s steps across on behind revenue, when of this then as maybe put kind and that recovery could a of some numbers industry. your line? and I of are up, maybe, core as your in we’re seeing much what in it some that quarter and could just second service what to you progressed mean the the and markets some bottomed kind with through the

Brendon Falconer

I Brandon. is the you this can charges. service Terry, with Hey help

don’t So rebound. charge meaningful It’s our in really not down most been service basically shortfall we And to QX decline. drove overdrafts expect of seen QX, that we that’s we remained any and change. million have to approximately that for down $X has felt and

levels. back quarter really As income normal QX, to but is that in a has half fairly of far as probably, a headwind million rebounded worth dollars interchanging

us. a that going think concern for will So forward I don’t be

Daryl Moore

are But that see still that item a they’ll those that might start I on think the probably winding the to stimulus benefits. programs impacted it extent service the line continue into to obviously to the think I by the being charges future, extent and normal. And the down, be extended under returned you’ll pressure.

Terry McEvoy

Thanks, Great. everyone.

Daryl Moore

Terry. Thanks

Operator

line of Arfstrom markets. capital the from with comes Jon question next Your RBC

Daryl Moore

Jon. morning, Good

Jon Arfstrom

maybe question Daryl, a X. for Slide morning. good you Hey, on

has talked a round from look of what slowed of in about activity second pretty slide dramatically, what just the starting You’ve deferral I for what a now? little flow of idea talk about in Give terms this terms an you’re you’re said bit quarter discussions that, and us of a the to coming know, you in second round? seeing might thinking like, occur. but

Daryl Moore

question. Jon, great Yes,

can we on call maybe those extensions. that deferrals basically maybe to little slower that that the fact are back end, coming XX about XX is would I than of a in, I it recall days kind of XX-XX had deferrals don’t greater of less you and We’ve know If than although last for lot and on split half I about thinking a days thought ask got than that front days. extend the don’t the XX deferrals

yet there. it’s seen So be to

new I deferral higher or upon to think don’t new if based think or request, requests. going days, significantly last see XX I XX just we’re the extension

don’t question? to of portfolios know what have If you’re than these going percentages that we that answers now. I your see higher So

Brendon Falconer

scenario, also and many seen commercial terms – Jon, pretty we’ve ability. early individual these, we’re about requests, the I of hearing would through or case be if add, one-by-one, we’ve as were it rents, gone their whether these we’re you worst case the things these planning go worst through for rent collection, in loans of positive

our back these with through So, we’ll that, we hopeful to as or as borrowers. cases go go these I’m mature renewals that normal

Jon Arfstrom

it And then that I alluded guess but as to question, kind of well, challenging another earlier.

saying loan just making reflect more that, is In it’s some so macro makes or That approach? to adjustments some you’re the in more it modest portfolio seeing and and by are Moody’s is a of the Overlay today provision as stresses loan? sense that using macro reserves you of, terms the it the individual of of reserves or outlook, well your that

Brendon Falconer

asset our even using but migration borrower we LTVs, of been factor quality the patterns Moody’s the we’re this certainly, ratings, all - very we have crisis. use all the as generally the which macroeconomic individual characteristics individual So overlay, through strong

So are loan data we assumptions. portfolio granular using our in

Jon Arfstrom

Okay, so ballpark? of the in Moody’s backs those if bit chance off we’re a provision a numbers if the lot

Brendon Falconer

think but should portfolio. meaningful scenario losses in reserve, our think in - If it the out, should reserve the I Moody’s adequate don’t we’ll plays reduction prove to out it see a be, I the

Jon Arfstrom

the curious of drivers in hanging in the that. then, one positive And I and on guess more the way, a dynamics pipeline there,

focused kind We’re curious obviously just of pick business the but that credit, all new pipeline, one my… on on

Jim Ryan

one. Jim, more take I encouraged this, by the category. Really Jon, the pipeline, will, the encouraged maybe of size by but I’ll Yes, that

category, that the we stable growth the line, accepted XX% see pipeline we quarter-over-quarter, those across did did XX% which the where - the some So finish was in stage. in traditionally stayed loans of proposal

from little anecdotal bit a more feedback So, our that have through our they’re our clarity, folks [indiscernible] optimistic. they borrowers commercial

our then little For bit half a year, down in rates the the and of quarter. second second were certainly pull-through the

about talking are see So projects some if acquisitions, still but we’ll about growth. continue, people talking

see. real so… to We're split happen we’ll between how encouraged But commercial third C&I but just we’ll pretty estate out, quarter. very what have could things and the wait So in about well see and play

Brendon Falconer

can help Jon in focused I'd businesses. also been really to grow on our segment have add, each all and they we what three to those of do what can leaders to one clients do continue

we're that, of coming production, So making while really hard, things the to second one and grow on, we’re serving looking each clients working back quarter, focusing opportunities those and distracted with probably PPP of segments. early we’re like for sure quarter, our and second kind of parts

Jon Arfstrom

thank Alright, you.

Operator

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

Jim Ryan

Good David. morning,

David Long

morning, Thanks taking Good call. my for everyone.

are PPP, some of it don’t that the forgiveness or category? the relates loans, amortizing over duration to two the five-year fees? are do in you the you you Assuming get years, those As have

Jim Ryan

all these not amortizing two over are years five years. the We over

David Long

headwind of in a you the public funds, trends? broader in third maybe there, be grow then here color bit Got obviously, I the the a trends, maybe about get deposits a a And can it. just quarter, thank quarter, PPP Got deposit it, little bit the you. just little more the may the talk third overall can if of little headwind, bit a

Jim Ryan

of I and trends alluded personal We product past. trend We’ll be saw see start to what seen payments gets fairly and back down, and think stable think deposit to kind Jim growth. that type, you’ve will in normal return every business, the the I come these comments increased normal, in the probably savings rate stimulus public funds and category, every across of quarter of will earlier and redeployed. sort as PPP then draw forgiven to down just

David Long

Thanks taking questions. for it? my Got

Operator

further time. no are questions there And this at

Jim Ryan

hesitate appreciate don’t day as today. hope usual, joining a any We to great Well, we have us you follow-ups. out. and available all Thank Please Great. are for much. we very you reach you

Operator

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

Jim Ryan	Chairman and Chief Executive Officer
Brendon Falconer	Senior Executive Vice President and Chief Financial Officer
Daryl Moore	Chief Credit Executive
James Sandgren	President and Chief Operating Officer
Scott Evernham	Chief Risk Officer
Scott Siefers	Piper Sandler
Christopher McGratty	KBW
Terry McEvoy	Stephens
Jon Arfstrom	RBC Capital Markets
David Long	Raymond James

Old National Bancorp (ONB) 20 Jul 202020 Q2 Earnings call transcript