Welcome to the Old National Bancorp first quarter 2014 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 8:00 am Central Time on April 29 through May 13. To access the replay, dial 1-855-859-2056, conference ID code 29183728. Those participating today will be analysts and members of the financial community. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session. At this time, the call will be turned over to Lynell Walton, for opening remarks. Ms. Walton?

Thank you, Selena, and good morning, everyone. Joining me today on Old National Bancorp's first quarter 2014 earnings conference call are Bob Jones, Chris Wolking, Daryl Moore, Jim Sandgren, Jim Ryan and Joan Kissel. Some comments today may contain forward-looking statements that are subject to certain risks and uncertainties that could cause the company's actual future results to materially differ from those discussed. Please refer to the forward-looking statement disclosure contained on slide four, as well as our SEC filings, for a full discussion of the company's risk factors. Additionally, as you review slide five, certain non-GAAP financial measures will be discussed on this conference call. References to non-GAAP measures are only provided to assist you in understanding Old National's results and performance trends, and should not be relied upon as a financial measure of actual results. Reconciliations for such non-GAAP measures are appropriately referenced and included within the presentation. Legal disclosures aside, those of you who have followed us for any amount of time know that we pride ourselves on our transparency and adaptation of our slide content to meet the needs and request review the investment community. We have attempted to this once again are pleased to present you with what we believe is an improved slide deck, one that focuses on the salient topics that you are most interested in hearing about. We remain fully committed to being completely transparent so if you find we don't cover a particular slide in our prepared remarks, you will most likely find it in the appendix. As always, we will take your questions following our prepared remarks. We will start the discussion on slide six, where you will find significant highlights of our year-over-year performance. I will begin by covering the high points, and following my overview our team and…

Thanks, Lynell, and good morning, everyone. I have had the pleasure of meeting many of you over the last five plus years of investor trips and the conferences. For those of you who have not had the opportunity to meet, I thought I would take just a second to share my background at Old National. I have been fortunate to serve Old National and our clients for the past 22 years. I have worked in various markets throughout the company. One small market, Greencastle, Indiana where I started my ONB career, a midsized market, Terre Haute, Indiana and a large market here in our headquarter city of Evansville, where I have spent the past 16 years. I have held various roles in commercial lending, served as a Southern Region Chief Credit Officer, as we were working through some serious credit issues 10 years ago and most recently I served as the Southern Region CEO with responsibility for day-to-day operations for the largest region in the company. I am truly excited about my new role and look forward to working with our credible team of associates to continue our path the high performance. At this time, I will move into my presentation, which begins on slide 10 with an illustration of areas of loan growth throughout our footprint. The three graphs on the top will represent markets where Old National had an established presence for some time. While it may not be surprising to see growth in Louisville and Indianapolis, it is worth noting that our re third-best mark in the first quarter was Muncie, Indiana. While growth in the Louisville and Indy was mostly commercial, Muncie also experienced nice growth in our consumer segments. The bottom row of the slide depicts some of our newer markets in recent acquisitions. While…

Thank you, Jim. Moving to slide 14. Total revenue less securities gains in the first quarter of 2014 was $123.5 million, which included accretion income of $17.9 million and a relatively high indemnification asset amortization expense of $7.3 million. Revenue, not including securities gains, indemnification asset costs or accretion income was $112.9 million in the first quarter of 2014, up from $111.8 million in first quarter of 2013 and up from $111.9 million in the fourth quarter of 2013. On slide 15, fully taxable equivalent net interest margin was 4.22% in the first quarter, up from 4.04% in the first quarter of 2013 and up from 4.11% last quarter. I’ve shown in the slide the impact accretion income has had in our reported margin. Our core margin has been fairly stable over the last several quarters but benefited this quarter from loans that move from non-accruing to accruing status. Accretion income will continue to be volatile in the following quarters, and we expect that core fully taxable equivalent margin will be in the range of 3.30% to 3.32% in the second quarter. Core margin may be positively impacted by loan growth over the next several quarters. Slide 16 breaks down non-interest income. Total non-interest income was $39.9 million in the first quarter of 2014, down from $45.3 million in the first quarter of 2013 and $44.1 million in the fourth quarter of 2013. Major contributor to the decline in non-interest income was the increase in amortization of our FDIC indemnification asset. IA amortization expense was $7.3 million for the quarter, $5 million higher than the first quarter of 2013 and $3.9 million higher than last quarter. The increase in the indemnification asset expense was due primarily to better performance of FDIC covered loans. The increase in accretion income from Integra…

Thank you, Chris. On slide 22, we have laid out for you net charge-off results for the most recently ended quarter, along with comparative data for both the same period in 2013 as well the fourth quarter of 2013. As you can see, we are fortunate to be able to report that on a consolidated basis, we were in a net recovery position for the quarter. While the dollar level of loan recoveries in the quarter were similar to those in the first and fourth quarters of 2013, we benefited from levels of both charge-offs in the current quarter that were roughly half the levels of those in comparative periods. These charge-off results obviously allowed us the benefit with respect to provision expense in the quarter. Within the segment of our loan portfolio not covered under an FDIC loss share agreement, we showed a slight net recovery from the allowance while on a consolidated basis, we booked a negligible provision expense in the period. Anomaly provision in the quarter compares favorably to the $800,000 provision expense in the first quarter of 2013 and the $2.3 million provision expense recorded in the fourth quarter of 2013. Allowance for loan-loss percentages as measured against the standard benchmarks were all confirmed to be within acceptable ranges at the end of the quarter, especially considering the marks on our acquired loan portfolios. On slide 23, we show trends in our special mention, substandard accruing and substandard non-accruals plus doubtful loan categories, excluding any FDIC covered loans. Special mention levels fell by roughly $23.1 million in the quarter while substandard accruing loans showed a somewhat similar $22.5 million increase. While there were numerous movements within these categories in the quarter, the transfer from the special mention category to the substandard category of two relationships approximately…

Good and thank you, Daryl, and by the way, happy birthday. My closing remarks will begin on slide 25, but before I begin those remarks, let me formally acknowledged Jim Sandgren's participation on the call. As with any change, there are new ideas and energy that are generated and that is truly the case with Jim's promotion. Barbara did an incredible job for us and Jim has big shoes to fill, but he is off to a great start. Let me begin my formal remarks with an overview of the economies in our market. I will begin with our home state of Indiana, which just announced its lowest unemployment rate since July of 2008, a rate of 5.9%. The Indiana labor force grew by 25,000 jobs in the first quarter. In addition, the state has recently experienced several significant economic development wins highlighted by GE's decision to locate its aircraft engine plant in Lafayette, Indiana. Another piece of positive news for growth in Indiana is the recently passed reduction in business tax, moving from a 6.5% rate over time to a 4.9% rate. Kentucky is also seeing positive trends, though not as strong as Indiana. Kentucky's unemployment at the end of the first quarter was 7.9%, though the Louisville market was better at 7.5%. The Kentucky job force grew by over 11,000 jobs in the first quarter. Southwest Michigan looks a lot like Kentucky with a similar unemployment rate of 7.6%. In Illinois, the unemployment rate dropped to 8.1%, which is its lowest rate since 2008. All of these positive numbers are supported by conversation with business owners who are expressing a much more positive outlook for their businesses that we have seen in some time. This is supported by the 24% increase we saw in our commercial loan pipeline…

(Operator Instructions) There are no questions at this time. I am sorry. Excuse me. There is a question from the line of Scott Siefers.

Scott, you almost got me so disappointed there, buddy. He always leads off with a question. Maybe (inaudible) was out of school or something.

No, I think I have been in the queue for about half an hour. They must have caught me sleeping here. So glad, I was able to slip one in. How are you guys doing?

We are doing great, Scott.

Bob, I was hoping that you could talk a little bit more on your thoughts on loan growth. You guys provided a bunch of good color. It's a mixed story, though, right. The pipeline is up a ton. The newer market is generating really strong growth that pretty much speaks for themselves then your commentary is very strong as well. Just curious, is there anything specifically, say this quarter versus last quarter that makes you feel more confident? And then, just as I look at the components of the pipeline, it looks like that the bulk of the growth was in the discussed category which I guess is probably the earliest stage there. So if can you maybe just provide a little more color on the overall pipeline? And then sort of the other part of the question would be, given that there is such strong growth from the newer markets, which ones are a little weaker than you would have hoped because just to make the math work, if there is growth in X there has got to be some compression in Y just to keep the overall number flat. So maybe if you could touch on that as well?

Yes, I think part of it, Scott, the fourth quarter, as you know, the pipeline was down, activity at that time was a little down for us and we saw a significant increase in our RM activity in the first quarter, which really has translated strongly into the second quarter and I think Barbara did a great job of setting the stage and getting things are put in place and with Jim's elevation it really kind of increased our energy partially Jim comes from a credit background. So he understands how to navigate and Jim has spent a lot of time in the field. So I think the combination that gives our RMs a great deal of confidence, the great work to Barbara did along with Jim. I think we are also seeing folks coming off, and I hate this weather, Scott, that January, February rally not much in the line, particularly in the north. We discovered, as we expanded in the north, there is a lot more snow and Chris covered one of our expense items was, we spent almost $700,000 in snow removal. It is hard to get out and make calls and get business. So I think the weather, but I think really it is the customers are more confident and I think our RMs are more confident. Markets, clearly we are seeing, on a relative basis, good growth in the north, typically in Michigan. But our legacy markets, Evansville, Muncie, Terre Haute are all doing well. If markets I am a little disappointed in, I think Louisville is very, very competitive, Indy is very, very competitive and it's finding that right niche in those markets for us to grow and we continue to work through the mark credits in Columbus, but a lot of great activities. We just completed a marketing campaign where made 100 calls in 100 days and we spent some good money there in marketing. We are starting to see that pipeline grow and I am very, very encouraged with Fort Wayne with the team that Wendell has assembled there. So hopefully that answers your question.

Yes, it does. That's perfect color, and I appreciated it. Then I just want to ask one separate one, just on expenses. Just given the volume of transactions, it is always a little tough to figure out exactly was going on, on an apples-to-apples basis, but it doesn't sound like there is any concern about the efficiency ratio targets by the fourth quarter this year. Just curious, as you see things, Bob, will hitting that target be more revenue driven or will it be cost-saving driven given that you have got the two deals that will close, excuse me, the one that just closed and then the next a little later on in the year. How do you see things coming out from a cost/efficiency standpoint?

It's a great question, Scott. I would say, as we talked to our Board, it's all about expenses. I think you have heard my stupid saying that, revenue growth is called if-come. If it comes, it's great, if it doesn't come, I am not going to bank on it. So we really are focused on reducing that cost basis to get to the 64.5% and beyond. Any growth we get in revenue will be great, but Chris, we have asked Mark Gorski to take a strong leadership role. Many of you may remember Mark from his days at IBT as their CFO. He has been a great addition to Chris's team and he really is knee-deep in working with Jim and others and Chris to make sure that it's all about expenses. He runs again, it's looking at things like imaging and how to remove paper, how do we do better job in our backroom and part of the reorganization we just announced with the multitude of changes but most particularly, Julie Williams is really to start with a blank sheet of paper and the design our operation so that we can be much more efficient in serving the clients save money. So a long-winded answer again, Scott, but it is all about reducing cost.

Okay, that's terrific. Thanks, Bob. Bob, I think that helped me.

Thanks, Scott. I appreciate it

Our next question comes from the line of Emlen Harmon with Jefferies.

Good morning, everyone.

How are you, sir?

I am doing real well, thanks. Yourself?

Doing great.

Great. Chris, I was hoping you could provide a little bit of a detail on your new assumptions regarding deposit repricing and outflows. I think it was last quarter or the quarter before, you guys had talked about your base case assumption was 20%, deposit outflows, when rates started to move, just curious how and how much you changed those assumptions?

I haven't translated those numbers yet to an overall number yet, Emlen, but I will tell you that we went through every line item in our transaction book and made some adjustments to duration, repricing, what we call beta, which is really the speed of repricing and like we said, in fact, I think we went back a couple of quarters talking about how we were going to work on this and we have had such tremendous growth in our transaction accounts but I think overall, were pretty certain that we were being a little hard on ourselves when it came to repricing and I feel like we are in really good shape. But I think importantly, we have talked about this, it doesn't really change the way we look at our overall rate sensitivity. We will still be a very careful about our investments and what we retain on the balance sheet in the way of residential mortgages and things of that sort. So while the output is a little bit different, I don't know that we generally feel that much different about how we are going to manage the market risk on the balance sheet.

Got it, okay. Thanks. Then the core margin was three 3.36% this quarter and you are talking about 3.30% to 3.32% going forward. Could you just talk us through what the drivers of the change are going to be there?

Well, I think as we talked about, clearly moving that large asset to accruing status helped us a little bit, and after we subtract that out, we will probably back down to our normal core margin, and Daryl, I think specifically said that that was about $1.3 million, $1.4 million. Again, I still look at us being able to manage that core margin in a relatively stable fashion. We don't have as much deposit repricing as we had last year. Still have some, but we are still getting good growth in our transaction accounts and that helps us quite a bit as well as I mentioned the core loan growth does not hurt either. So when we continue to have that, I would expect that that might give us a little bit of a lift. But the look forward kind of is flattish. Loan pricing continues to be actually somewhat of a little bit of a drag, but we are still, a lot of floating-rate loans, we have gotten through the bulk of our repricing over the last couple of years. Feel pretty good about it.

Okay, great. Thanks for taking the questions.

Well, thanks, Emlen.

Our next question comes from the line of Stephen Geyen with D.A. Davidson.

Good morning, Stephen. How are you?

I am well. Good morning. Maybe just a follow-up question to Scott's comments on the commercial loan pipeline utilization. Great to see the pipeline building there, but as far as utilization, just curious if you are seeing existing customers scale back or is it really a function of the lower rate there? Is it a function of loan growth and then it just takes a while for those new loans to build to be utilized?

Pipeline, again, would be lines of credit people drawing on short-term working capital needs and as Jim said, we have still got a lot of our larger line users that are flush with cash and instead of using our line at 25 basis points, they are using their own cash. So I am not sure that we will see in the immediate few quarters any significant movement in the pipeline, because as Chris has been saying, we have so much cash from our larger borrowers, we actually can tell you by our most borrower where they are in line utilization and a lot of our normal historical large users are still sitting at a zero balance and keep talking to them and trying to encourage them to borrow but they keep saying they have got cash, but the good news is, they are getting deals. One of our larger borrowers has always been, somebody in the contracting business, and they are starting to get a lot of that and a lot of significant deals. So that should transform at some stage in the future number into using their line again.

Okay, and last question. You gave some comments or color on the expected one-time costs for Tower and UBMI acquisition in 2Q of $6 million to $8 million. Do you expect all of the Tower expenses to be completed by the end of the second quarter and do you expect all of the UBMI one-time costs be done by the end of the year?

Yes to both.

Okay. Thank you.

Thanks, Stephen.

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

Good morning, Jon.

Hi, good morning. Pretty comprehensive in covering everything but I have a couple of follow-ups here. The borrower confidence comment you made a couple of times, Bob. Do you feel like it has changed or it's improved over the last quarter or two?

Absolutely. I was just in Bloomington, Saturday night, for a large client function at IU and there is no apprehension to their positivity, if that's even good English, but I feel really good about my business, but I am worried about the Federal government. I am worried about this. I am feeling good about my business. It's pretty broad-based and I will tell you, it's like somebody took a cork off a bottle of champagne at the end of first quarter, maybe middle of first quarter. You are starting to see a lot more movement. Now could some change tomorrow? Maybe, but the biggest example, you just look at Indiana with the 5.9% unemployment. We cut our business tax on a statewide basis and I think that really sent a strong message to our business owners that their state is really committed to growth.

Okay, good. The, Daryl, I kind of the judge the credit concern by the number of slides in the deck.

We are trying to work Daryl out of it. It's his birthday, guys. We are trying to give him a break [ph].

So you are down to two slides, but anything, obviously Bob talked about the pricing issue but anything out there that makes you a little bit nervous or anything saying we need to be ultra careful, how you are going to avoid it?

Bob is evil eyeing me here. So I have to be careful as to what I say. Seriously, I don't think that there is anything terribly troublesome that we see in our portfolio on the horizon. There are obviously industries that we just have to be a little careful about. For instance, healthcare. In healthcare, we are taking a real close look at anything that we have, any kind of request just --> [Author:SM] simply because of the uncertainty, but as you look really through our portfolio, Jon, there is just nothing today that it is creating a lot of anxiety for us in terms of the things that are on the horizon that we are concerned about.

Maybe talk a little bit, Daryl, about competition you are seeing.

Yes, the competition, the first that goes is pricing, obviously. The second thing that goes is structure. And we are seeing a lot of competition with respect to what we and the creditor would see as weak structure. I think the regulators would see it as weak structure. Some of that has to have to happen. There are just clients who deserve to have a little softer structure than maybe we had four or five years ago but as I commented, the best banks are going to have to determine where you draw that line. We just are going to have to figure out where that is and hold that line because we know the next cycle will come but we need the current production. So it's a balancing act today, for sure.

Okay, good, and then just maybe your comments on the reduction in overdraft presentments and maybe changing consumer behavior. I guess tied to that and maybe the Durbin mitigation in which you have two deals closing. Give us an update on your thinking in terms of how to offset some of the blow or is this something you accepting going forward?

Well, I think we accept the history and move forward. I think with our acquisition, our partnership in Fort Wayne and UBMI and as I said, the pipeline is there for Jim and to others, we clearly know we have got to grow above that purgatory base that we are in now with slightly over $10 billion just to cover it. I have spent some time in Washington. It is our hope that at some stage in the future that that line moves maybe to $50 billion but we are not counting on it. I think, Jon, as we know as we go to continue to drive costs down, drive revenue up to cover the inherent effect of Durbin and hopefully we can land another couple of deals that will more than cover it, but it is there and we are painfully aware of it. But I am confident that we get through it by the time we are assessed.

Okay. All right. Thanks for the time.

Thanks, Jon. I appreciate your time.

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

Hi. Good morning, guys.

Good morning. How are you?

I am great, Bob. The color on your discipline and (inaudible) was helpful. I am interested in the one credit you did lose that you didn't want to lose. Could you size up how large it was and what the rate and maybe who stole the credit from you?

I can do that because I was involved in that and I am going to take partial responsibility for losing it mostly based on my personality. But it was a technology-based company and they came to us for a new opportunity which we priced aggressively and actually we matched the pricing of the company we lost it to. What we failed to do, quite frankly, is to go in and reprice the existing relationship which our competitor did do and the client just said, you know what, you guys gave me a great opportunity on the new credit but you left my old credit there. The other folks did it and we went back and said we can do it and he said, you should have thought of that the first time. Quite frankly, I will take full responsibility. I still stay in touch with the client. I told them, I am going to stalk them till I get them back. But a lesson learned for us, and I think Wendell and his team were at the time dealing with a lot of things and we just led something slide and we screwed up.

Okay and this is in Wayne [inaudible]?

It is in Fort Wayne actually. Yes.

Okay, on the Fort Wayne book, can you remind me of the size of the loan book today versus when you acquired (inaudible) the disruption that occurred?

Yes, it's about $450 million. We are down about $50 million, roughly, Chris. And as Chris or Daryl said on the call or Jim, a lot of that was, we marked the credits and Rick Sawyer and all the folks in Tower did a great job working through those credits. So a lot of that was marked book and as Chris said, we expect that the mark when we bring that book over should be less than what we originally stated.

And is the intention for the rest of the year to grow that book?

Yes. We have got Randall, very energized. We hired the new head of our senior commercial banker from Wells. We have got a good cadre of team we have built there and I will tell you what, one, it's a great market, very, very competitive, as you are seeing but we are going to grow that book and we have got an advisory board up there that's very committed to working with us to grow the book. It's chaired by Keith Busse, who was the former chair of Tower.

Okay, and maybe I missed this but the size of that credit that Tower, the one that moved away this quarter? Is that a seven figure deal or an eight figure deal?

Yes. It was so low seven figures.

Okay, one for Chris. On the capital ratios as they shake out once the deal closes. I am running a quick math, is mid to upper seven on the tangible, is it kind of in the ballpark once all the [inaudible]?

Tangible book value?

No, I am sorry. Tangible common equity. The tangible assets.

I think the number we talked about was a little higher than that originally. Jim, was it about [8% or 7%] [ph]. I don't know that it's going to move too much but it is awfully hard to tell, Chris, until I get all the marks done and we look at the size of the portfolio. About the only thing I am sure of is, as Bob mentioned, that the mark on our asset should be will bit lower than we had anticipated, which will help.

Chris, I think when we announced the deal, we thought it would be around 8%-ish. I am not so sure I will move much below that.

Thanks a lot.

Thanks, Buddy.

Our next question comes from the line of Taylor Brodarick with Guggenheim Securities.

Hi, Taylor.

Good morning. Thank you everybody. Very thorough presentation and questions. So I only have one left. Daryl, just looking at provision, negligible to zero; what would it take inflection point wise to see a change in that trend? Just looking at what the reserve and marks are to the pre-marked loans?

That's a great question, and let me ask you, when you say, a change, are you thinking about higher provision.

Yes. Exactly.

One of the things that we look very closely at, obviously, is our asset quality ratings and if we see deterioration in those asset quality ratings and begin to see that play out which we don't anticipate, that could move out loan growth obviously. It would be a great way to move that. So I would say, in today's environment, those would be the two biggest probably influencing factors.

Okay, great, and Chris, I am sorry, just to make sure I got this right. On the non-recurring stuff for 2Q and 3Q, because I have had like $11.5 million for Tower. So if you take out the $2.5 million one more time for 2Q and 3Q, what are we looking at for the one times?

The one times, our total was $6 million to $8 million, our expectation for the remainder of the year. Probably for second quarter, largely most of that would be Tower and I don't have a breakdown for me but…

It’s actually $2 million. We expect somewhere around $2 million for Tower in the second quarter. The balance of that UBMI. Tower then will be pretty much done with one times and anything else would be UBMI related.

Okay, great. Thank you everybody.

Thank you.

Our next question will come from the line of Peyton Green of Sterne Agee.

Good morning, Peyton.

I am doing fine. But a question, maybe Chris on the interest rate risk. Not that we expect rates to drop anytime soon but what is the cash flow profile like of the combined portfolio, on a pro forma basis? How much cash flow do you expect over the balance of the year? What's the roll off yield? Where are you buying the paper today?

Peyton, generally, I have that in the slides. We didn't include it this quarter, but it’s $300 million to $400 million current run rate. It hadn't changed that much. If it is significantly different from that, I will let you know. But it is still pretty high cash flow expectations and as I mentioned, we were largely looking at relatively short-term reinvestment opportunities there. The real benefit comes obviously is that money gets moved into loan growth.

Okay, does that mean, would you say, -- how much would you give up on the roll off yield versus what you are buying? Is that 150 basis points? 100 basis points?

I don't think it's that much. We haven't looked at it specifically. I will have to tear into our forecast a little bit. So I don't really have that at my fingertips.

We will get for you.

Okay. All right. Great. Bob, how is the M&A opportunity? You mentioned that commercial customers were decidedly more optimistic, which makes the organic growth probably easier to achieve. Does that give others maybe pause to exploring strategic options? Or what's your thought on that?

Yes, it really does, Peyton. We are still in the market where everybody thinks they are a buyer. Every call I have listened to, almost everybody says they are actively looking at M&A, which I think the industry needs to have happen. I think over time what happens is, you will see maybe organic growth come back. We still have got regulatory cost that lays on top of that. You have got an interest rate environment that's still a challenge. I think those are the two things that most Boards are thinking about now. Quite frankly, without being arrogant, the fact that we were able to do a conversion in Fort Wayne with virtually no pickups over the weekend, the fact that we can get regulatory approval when a lot of banks are still hoping for that, we got advantages when we established three years ago that M&A was going to be a line of business. So I think, clearly it's competitive. You have seen a lot of books. You are getting a lot more people at the dance. And you just have got to do what's right for your shareholders at the end of the day.

Great. Thank you very much.

Thank you.

Our next question will come from the line of John Moran of Macquarie Capital.

Hi, John

Good morning. How's it going?

Going great. How are you doing? Nobody has yet wished Daryl happy birthday, John.

Happy birthday, Daryl.

John, thank you for that caring thought.

Most of mine are asked and answered. I just have two ticky-tack follow-ups. One is just on the tax rate. Chris, I want to make sure I heard you correctly. It sounds like it is ticking up a little bit in the second quarter and 26% or 28% for the year? Is the correct?

Yes.

Okay. So we ran a little bit below 26%, I think effectively this quarter. So maybe run a little bit above the high end of the range and then just normalize it for the rest of the year and shape it out a particular outcome. Okay. Great. And then, Bob, I think you alluded to this a little bit in the answers to somebody else's question on some of the newer markets. But just wondering what the hiring pipeline looks like and thoughts you have up there? I know that you were looking to upgrade, add or change in some of the markets and if you could just give us a quick update there?

Yes, obviously, Wendell's leadership has done a very nice job in Fort Wayne. We still have some opportunities in Indianapolis. In fact, Jim and I are heading up to Indy on Friday. We think there is some opportunities to add talent in the Indy market with some of the changes that have been going on for large regionals. Removing the backside, where we are seeing a good amount of opportunity, John, is really with our insurance group. We are seeing the Wells purchase or sale, I should say, has created some opportunities and there is some disruption in the insurance side. So we have added staff in wealth and investments. So a long-winded answer as usual, but I really want to be opportunistic in hiring people. If you at getting an inflection point with the growth in the economy, now is the time to add good quality talent and we are continuing to look to do that.

Sounds good. Thanks very much, guys.

Thank you.

The final question will come from the line of Mr. John Rodis of FIG Partners.

Good morning, guys. I guess most of my questions have been asked and answered but, Chris, I guess one quick question for you on expenses. You had the, what the $2.5 million in M&A charges during the quarter, but it looks like most of that was offset by some real estate related items or I guess some tax items. Can you just talk to that real quick?

Yes, we would, I think, in that some of those numbers we had some good recoveries and some where we also had -- I am sorry, $2.2 million on a nice recovery previously paid real estate taxes as we reappraised and challenged to real estate taxes which worked out very well for us. Obviously that, we don't anticipate those kinds of things to happen every quarter.

Okay. So sort of those tax related items sort of offset the merger charges. Is that the right way to think about it?

I think that's pretty close. Yes.

Okay. Thanks, guys.

Yes. Thanks, John.

There are no further questions.

Great, well, thank you as always. So you know as always, I will say, if you have questions, let Lynell know. If there is something you would like to see, it's either add or delete from the revised presentation, let her know as well. We appreciate everybody's interest in Old National and happy birthday, Daryl.

This concludes Old National's call. Once again, a replay along with the presentation slides will be available for 12 months on the Investor Relations page at Old National's website, oldnational.com. A replay of the call will also be available by dialing 1-855-859-2056, conference ID code 29183728. This replay will be available through May 13. If anyone has additional questions, please contact Lynell Walton at 812-464-1366. Thank you for your participation in today's conference call.