Welcome to the Old National Bancorp Second Quarter 2014 Earnings and Acquisition Announcement Conference Call. This call is being recorded and has been made accessible to the public in accordance with SEC's Regulation FD. The call, along with the 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 a.m. Central Time on July 29 through August 12. To access the replay, dial 1855-859-2056, conference ID code 73472033. 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, Holly, and good morning, everyone. Joining me today on Old National Bancorp's second quarter 2014 earnings and acquisition announcement 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 five, as well as our SEC filings for a full discussion of the company's risk factors. Additionally, as you review Slide six, 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. We've got a lot to review with you this morning. First we'll provide a detailed analysis of our second quarter earnings and then we'll discuss our announced acquisition of Founders Financial Corporation and entry into the vibrant Grand Rapids, Michigan market. I'll start on Slide seven, where you can find highlights of our performance as they relate to our 2014 initiatives. Increase in core revenue, reducing operating expenses and transforming the franchise into higher growth market. As we focus on core revenue growth, arguably the most significant highlight of the quarter is the $139.6 million or over 11% annualized organic loan growth we experienced in the second quarter, which was spread across all loan categories. Year-over-year, we grew loans $214 million or 4%. This loan growth is net of loans acquired through acquisitions and excludes the change in covered loans and that's equally important with the over 4%…

Thank you, Lynell. I'll begin my presentation on Slide 10. To provide further clarity regarding our results, we added a new slide that illustrates our progress in a number of areas. Over the last several quarters, we've discussed the impact of accretion income and the indemnification asset amortization expense on our earnings, but we believe this chart represents the sustainable long term benefit of our work at Old National. Most notably, the chart shows the benefits of our acquisitions. The bars represent annual income before tax through 2013 minus the expenses associated with acquisitions and divestitures, minus accretion income and minus the impact of the changes in the Integra related FDIC indemnification asset. The last part on the chart shows adjusted income for the first six months of 2014. We believe the chart clearly shows the important contributions of our partnerships in Bloomington, Columbus, Michigan and Fort Wayne. Additionally, adjusted income has benefitted from the work we've done on expenses, our low credit cost and our loan growth. Slide 11 shows core revenue increased 4.1% over second quarter 2013. Total revenue for the quarter was $122.4 million, down slightly from first quarter of 2014 and from second quarter of 2013. We account for changes in the FDIC indemnification asset as revenue and the change in the IA generated a cost in the quarter of $10.5 million. This cost was the driver of lower revenue and masks our strong increase in core revenue. Net interest income and most fees increased over second quarter 2013. Net interest income not including accretion income increased 3% over second quarter 2013. Wealth management revenue increased 17%, debit card fees increased 9%, insurance premium revenue increased 5.3% and brokerage revenue increased 1%. Mortgage was the only area that saw a decline in revenue from second quarter…

Thanks, Chris, and good morning, everyone. I’d like to begin my own remarks by expanding on a topic that Lynell addressed in her opening comments, the strong organic loan growth that we experienced in the quarter. If you’ll turn to slide 17 you can see that our loan growth over the past 12 months excluding covered loans has been driven by a combination of partnership activity and solid organic growth. The $360 million in loans obtained through the acquisitions included $355 million from our Fort Wayne-Tower partnership and $5 million from our Bank of America transaction. The $214 million we experienced in organic loan growth was boosted by a strong second quarter that included an increase of $76 million in commercial and commercial real estate loans and additional growth indirect lending. While we enjoyed success in a number of our markets, I was especially encouraged by increased production in our two largest markets, Louisville and Indianapolis, as well as one of our newest markets, Michigan. I also want to note that the loan sale of $109 million depicted on this slide took place in the third quarter of 2013 and included $96 million in residential mortgages and $11.6 million in commercial leases. Moving to slide 18 you can see that we continue to build upon a positive momentum in our commercial loan pipeline that I shared with you last quarter. This is particularly good news, given an excellent production we experienced in Q2. We have seen meaningful growth in the commercial pipeline in some of our newer markets Bloomington, Columbus and Fort Wayne, as well as in a couple of our legacy markets, Evansville and Terre Haute. We also saw a nice increase in commercial line utilization in the quarter as utilization increased from 34% in the first quarter to…

Thank you, Jim. On slide 21 we display for you net charge-off results for the most recently ended quarter along with comparative data for the same period in 2013 as well as the first quarter of 2014. Consolidated net charge-offs for the quarter were a respectable 7 basis points, although higher than levels posted last quarter and in the second quarter of 2013. Through the first half of the year losses on an annualized basis are 2 basis points. Losses in the current quarter came almost exclusively from the covered portfolio with over $900,000 of the total net charge offs over $1 million coming from that portfolio segment. As you know, losses from that particular portfolio are sheltered in part by our 80% loss share agreement with the FDIC. One borrower in that FDIC covered portfolio accounted for over half of the total amount of losses in the period. With respect to provision expense in the quarter on a consolidated basis we reflected a modest $400,000 recapture out of the allowance account. While the non-covered portfolios identified a provision need of roughly $1.1 million, this was more than offset by an indicated recapture of $1.5 million associated with the covered portfolio. The need in the non-covered portfolio was driven in part by the loan growth experienced in the quarter. On slide 22 we show trends in our special mention, substandard accruing and substandard non-accrual plus doubtful loan categories, excluding any FDIC covered loans. The levels of these categories all increased during the period, but in the case of our special mention and non-accrual and doubtful loans the increase was due slowly to the addition of loans associated with the closing of the Tower Bank transaction. Without the Tower loan portfolio additions the special mention loans levels fell by roughly $13.5…

Great. Thank you, Daryl particularly for another strong, or as you said, respectable quarter for credit. As we began our presentation, we purposely started with the slide reinforcing the alignment of our strategy with what we have executed over the last few years. I believe that this is a very important message and particularly relevant as we look at the second quarter. We committed to organic growth and this quarter saw strong loan growth and good fee-based business revenue growth which led to an overall growth in revenue. We committed to strong expense management. Excluding the cost associated with our recent acquisitions, our operating expenses year-over-year were down. More importantly, we have covered the additional cost of compliance and we’ve yet to realize the full benefits of the Tower integration or any benefits from the United integration or the number of projects we continue to execute and then improving our efficiency. We committed to transform our franchise from lower growth small markets to a franchise with a strong growth markets throughout Indiana, Michigan and Kentucky. And as part of that committed strategy, we identified key markets we want to be located in to improve our growth profile. Our entries into Columbus, Bloomington, Michigan and Fort Wayne clearly are important part of that growth that we saw this quarter. And as I will discuss later, we feel very good about the impact these and our other new markets will have on our future financial performance. Bottom line, I am very pleased with this quarter and believe is a good indicator of what the new Old National can achieve as we continue to execute our basic bank strategy. Moving to slide 24, before I discuss the Founders transaction I thought it would be beneficial to recap the other transactions we’ve announced over…

(Operator Instructions) Okay. And your first question will come from the line of Taylor Brodarick with Guggenheim Securities.

Good morning, Taylor.

Morning, everyone. Congrats on the deal.

Thank you.

First question, I was looking at the deck from the United announcement in January and where the kind of restructuring cost came in at? It seems like they’re going to be a lot lower than anticipated, am I reading that correctly?

Let me just pull that. I’m looking at that. We estimated -- bear with me…

I have $18 million.

Yeah, we got about $18 million. In our senses that will be that will be less than that and I think Chris covered what we expect to take this quarter, but they'll be slightly less than the $18 million.

Okay. Okay, so the three to five is going to be mostly united for 3Q.

Yes almost entirely. A little bit of LSB.

Okay. Okay and then I guess question for Jim Sandgren about the organic and acquired breakdown. When -- obviously it seems like you didn’t mention Monroe and some of the older more seasoned deals. When do you incorporate them into the legacy franchise when you’re looking -- when you're breaking that down?

Yeah, as for the timing, I can’t tell you exactly Taylor, but we continue to really see some nice directional growth from Bloomington and Columbus, especially in the pipeline. So we anticipate continued growth from those markets, but like you said they’re getting closer to -- to being more of a legacy market but still a lot of focus on both Bloomington and Columbus. So we continue to be pretty excited about what we see out of those markets.

Hey Taylor, this is Bob. I might add if you look at Chris’ slide on net interest margin and you look at the accretion, really -- when you get a studying of the value of the accretion is really where it becomes a legacy market and we’ve seen multiple quarters with Indiana Community where it's been pretty much flat to even slightly growing but you kind of get a sense when you lose -- when a lot of accretions gone and it really becomes legacy and it becomes awfully hard to compare. So I think that's a good indicator using Chris’ Slide 12.

Okay, great. Thanks Bob and I guess last question, sounds like Jim Ryan is going to be going back and forth to Louisville from his comments. That’s where the last…

Everybody knows he can’t -- we’ve been very lucky that we identified markets we want to be in and actually Jim did a great job of identifying potential partner banks and stars and the moon aligned. Louisville is a great market, got great institutions and my sense is there’s a lot of people who want to remain independent and they’re in Louisville but we’re available if anybody is looking for a good partner.

Thanks everybody.

Taylor, its Chris Wolking. I might just add that the total cost that we talked about in our announcements include those costs that are absorbed in our income statement as well as the income statement of the partnership bank. So those costs -- the costs that we provided at $3 million to $5 million would be those expenses we’d expect to see on our income statement as we wind down the UBI -- UBMI acquisition and get involved in the next transactions as well.

Okay. Thanks Chris.

[Operator instructions] Okay. We do have another question queued, the line of Jon Arfstrom with RBC Capital Markets.

Good morning, Jon, how are you?

Good morning. Doing great.

Its 68 here in Grand Rapids. I don’t know what is up in Minneapolis but it's beautiful.

Beautiful; it's balmy here. Well now I get to ask all my questions if nobody else is in the queue. It would be fun. Just a question on the pipeline, is there a way to give us an idea of how much of the pipeline is more producers being in more markets versus change in the borrower sentiment and more willingness to borrow from maybe the existing core. Does that make sense?

Yeah, great question. Jim Sandgren is probably the closest to answer that.

Yeah, certainly the fact that we are in more growth markets I think that has certainly helped but as I alluded to, I think the slowly improving economy are giving us more opportunities to look at deals. Obviously very competitive out in the market today, but I think it’s a combination of us being in the right markets, more growth markets as well as our borrowers are really starting to feel a little bit more comfortable about the economy and willing to invest in growth strategies for their businesses.

Hey Jon, this is Bob. I might just add I think a real testament to Jim Sandgren who’s been out and visited a lot of these markets and really has our sales force all focused on growth -- prudent growth and really has done a great job of getting the folks energized too.

Okay. Good and Jim do you think or Bob as well, the utilization rate that you lay out being I think maybe three percentage points below that. Do you expect the company to get -- be able to get back there or maybe above since it is a long term average?

I think with the improving economy Jon and what we’re hearing from borrowers as they continue to talk about expanding inventory and producing more -- I am reasonably optimistic that you get to that level much more so that I would have been a year ago. One of more challenges is we have had a couple of large line users if that’s proper English that once sold their company and they were historically a big borrower, but I think other than that I am reasonably comfortable being pretty close to that.

Okay, good. Then, Chris, maybe a question for you on the margin. You went through some of the puts and takes and the near-term outlook, but longer term does it feel to you like the core margin, excluding all of the accretion noise, that core margin is starting to stabilize?

It's always hard to look too far out on the margin, but I will tell you Jon that seeing the loan growth, and thinking in terms of those of investment portfolio cash flows being reinvested into loans, I really like that -- that move and as you know, we’ve always maintained a fairly high percentage of our earning assets in the investment portfolio and we’re trying to be very careful about where we’re placing that. So I think long term that benefits the margin. Our good deposit base benefits the margin long term, particularly if rates start to go up, but I really like the dynamic of the improved earning asset mix.

Okay. Good. And then just more of a technical accounting question, but the $29 million left in the indemnification assets, pretty big amortization over the last two quarters and I think you mentioned you have a couple years left. I know it's almost impossible to predict this, but it seems like that's going to drop off pretty materially at some point. Is there a way to think through that?

I think that’s fair. You know what we see here -- have seen here recently is much of that accelerated amortization expenses due to the improvement of some large assets that we’ve got remaining in that portfolio. As we look forward we don’t have as many large potential asset quality improvements as we’ve had recently. There’s still a couple left, which could drive the amortization expense around but you’re right, we were at I think about $38 million at the end of last quarter and we’re down to $28 million. You wouldn’t normally have expected that much amortization with still two years left remaining in the commercial indemnification period. So we’re watching it closely. We’ll certainly call out those changes and to the extent that the expected expense changes we’ll make sure to let you all know about that as well.

Okay. Good. And then just one more for you, Bob, on Grand Rapids. Obviously you said it was competitive, but my sense is with a relatively small footprint there is more to come in Grand Rapids. Can you maybe talk a little bit about how you think through that market and where you would like to be longer term?

Yeah we think Grand Rapids is a great market. We think it’s also a market that is looking for a bank of our size that is deeply committed to the communities like we are and we've kind of -- as everybody may remember both Chris and Jim worked at the former Old Kent and there’s a lot of opportunity for us to come in and replicate what Old Kent did and we think there’s great opportunities in these markets. So we’re committed to continue to build here and look for the right way to do it but saying that with Lori and Greg in the management team here at Founders, we’re very comfortable that they can do some great things given their resources.

And so they -- would you consider de novo and larger lending limits and more hiring, is that the initial plan?

Well you know they’re going to have larger lending limits because clearly our capacity to lend is much better than the Founders. We do believe there maybe some opportunities to expand staff up in these markets again based on a lot of -- our guys have connections and our Kalamazoo market’s not that far away. Chris and I debate de novo entry. We’re looking at it again Jon. It maybe a prudent way to expand a little bit but we’ve got some other markets today like Louisville and others that de novo also may make some sense. So we’ve those conversations, but I think given the footprint that Lori and Greg have here we know we've got a lot of good upside.

Yep. Okay. All right, thanks for the time.

Thanks Jon.

And your next question will come from the line of Michael Perito with Keefe, Bruyette & Woods, Inc. Michael Perito - Keefe, Bruyette & Woods, Inc.: Hey everybody.

Michael, how are you? Michael Perito - Keefe, Bruyette & Woods, Inc.: Good. How are you guys?

Good. Michael Perito - Keefe, Bruyette & Woods, Inc.: I thought maybe I would ask a quick follow-up on the Grand Rapids question, more pointed towards the lockups and how you feel about retention at Founders and more specifically on their lenders. But also there was a recent MOE closed in Grand Rapids and another deal in the last six months. Do you guys plan to aggressively pursue any additional lenders or anything of that nature once you guys close that deal in early 2015?

Yeah, great question. So let me address the first. You know clearly I learned a valuable lesson in Fort Wayne as I said to you all and I've said publicly before. I made some serious mistakes in Fort Wayne and I don’t want to do that again. So I will tell you that we’ve already got retention plan in place. Greg and Lori have looked at it. It’s the quickest we’ve ever put in place a retention plan and again I think Lori and Greg are fully on Board and you never say never but I feel very good about where we are in terms of retention of our associates. And again we’re going to be opportunistic in looking for ways to grow up here. Again both Chris and Jim have a lot of contacts up here. I am sure their emails have been buzzing but it’s up to us to prove that as I am going to say the associates at Founders this afternoon, we’ve got to earn their trust and respect and I think we’ve got to earn the market’s trust and respect that we do the things we say we do and if we do then I think we have an opportunity to expand our -- our associates here. Michael Perito - Keefe, Bruyette & Woods, Inc.: Okay. Thanks. Another more big picture question, the organic growth in the quarter was very strong and obviously a function of the effort you guys have made to get into higher growth markets, like you said in your prepared remarks. At what point does it become a more efficient use of capital to just fund organic growth versus additional M&A?

Great question and I am not so sure that -- as I have said in my remarks and I think Chris will reiterate, we’ve built a foundation and now is the time that we can continue to execute and be a little more opportunistic. We look at the markets we’re in. We have great people. We are in the right markets we want to be in and what I would like to be bigger in Louisville absolutely is there are scenarios in Northern Indiana that could be bigger. But right now we’re really looking at the end market to build upon the foundation. So I think -- quite frankly, in all candor, I think there are probably some investors that will want us to take a deep breath and prove that we’ve used their capital in the right way. I don't know Chris do you have anything to add to that?

So we’ve always talked about -- Michael about our priorities and our opportunities to use capital and we’ve always agreed that organic growth was at the very top of the list and acquisitions and returns of capital was below that. So absolutely and obviously it takes energy from our lenders, it takes enthusiasm by our customers and it takes the new markets to gain some traction for all of that to happen and we’re perfectly willing to do whatever it takes to make sure we’re doing what we think is best for the capital for you all. Michael Perito - Keefe, Bruyette & Woods, Inc.: All right. Thanks a lot of guys. I appreciate.

Thanks Michael.

And at this time there are no further questions. We will turn the conference call back over to Bob Jones for closing remarks.

Well great. I should’ve said this in the beginning, we do apologize for kind of giving earnings and then our partnership announcement all in one, but it’s purely by coincidence, but as I said, I think it allows us to continue to put and illuminate our strategy. If you have follow-up questions, as always, Lynell is in (812) 464-1366 or drop her an email. We appreciate everyone’s intent and we look forward to talking with you in the Fort. Thanks everybody.

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 of Old National's website, oldnational.com. A replay of the call will also be available by dialing 855-859-2056, conference code ID 73472033. This replay will be available through August 12. If anyone has any additional questions, please contact Lynell Walton at 812-464-1366. Thank you for your participation on today's call.