Welcome to the Old National Bancorp Fourth Quarter 2008 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 twelve months on the Investor Relations page at www.oldnational.com. A replay of the call will also be available beginning at 1:00 p.m. Central Time today, through February 9. To access the replay, dial 1800-642-1687, conference id code, 801-278-32. Those participating today will be analysts and members of the financial community. At this time all participants are in a listen-only mode. Later we will hold a question-and-answer session and instructions will follow at that time. At this time, the call will turned over to Lynell Walton, Director of Investor Relations for opening remarks. Ms. Walton?

Thank you, Cheryl and good morning to all of you. We appreciate you joining us for Old National Bancorp's fourth quarter 2008 earnings conference call. Joining me today are Old National Bancorp management members, Bob Jones, Chris Wolking, Daryl Moore, Julie Williams (ph) and Joan Kissel. Before we begin, I would like to refer you to slide three and point out that the presentation today contains 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. These risks and uncertainties include, but are not limited to those which are contained in this slide and in the company's filings with the SEC. Slide four contains our non-GAAP financial measures information. Various numbers in this presentation have been adjusted for certain items to provide more comparable data between periods and as an aid to you in establishing more realistic trends going forward. Included in the presentation are the reconciliations for such non-GAAP data. We feel that these adjusted metrics do provide a meaningful look at our current performance as well as our performance going forward. If you turn to slide five, you'll find our agenda for the call. First, Bob will provide our perspective on the economy and its impact on the financial services industry. He'll then review our fourth quarter earnings and other significant events of that quarter; one being are announced Charter One acquisition. At which time Julie Williams, Director of Merger Integration will give you an update. Daryl will then provide commentary on various credit quality metrics and granularity of our loan portfolio. Next, Chris will detail the movement in our net interest margin, provide commentary on our capital position in the holdings and areas of risks within our investment portfolio. Bob will conclude with our financial outlook for 2009, and then we will open the call for your questions. And just as a reminder, our appendix does include regional balance sheet data as well as major items impacting our non-interest income and expenses for the quarter that may be helpful to you in analyzing our results. With that, I'll turn the call over our CEO, Bob Jones.

Thank you, Lynell and welcome to all of you on the phone and listening via webcast. I hope that you all had a wonderful holiday season, though I'm sure if it's any like me, it seems it was an awfully long time ago. Before I start, if you just allow me, a little bit of company news, based on input from many of you and what we view as one of the best Investors Relations professionals in our space, we are pleased to promote Lynell Walton to Senior Vice President in our last board meeting. So, I'm sure that all of you join me in congratulating Lynell. Before I begin our formal presentation, I thought it would be important to give you our perspective on the economy and the industry. Our view of both is quite frankly is the same. It is bad and it's going to get worse. At the end of the third quarter, we told you that in our opinion any recovery was quarters and not months away, and we still believe that. Our opinion is that the economy is in a very deep and long lasting recession, and that the earliest we can see any positive trend is the third quarter of this year. But, more than likely, any recovery will be in the first part of 2010. The economic slowdown moved very quickly in the fourth quarter to those sectors not previously impacted, most notably; the consumer, commercial and industrial and small business as well other areas. The impact of this economic uncertainty in our industry will be an elongated negative credit cycle, what began in the summer of 2007 and exploded in the September of 2008, was what I have termed a synthetic credit crisis, driven by financial institutions' inability to move illiquid assets…

Thank you, Bob. As you may recall on November 25, 2008, Old National entered in to a purchase and assumption agreement to acquire the Indiana retail branch banking network at Citizens Financial Group which consists of 65 Charter One branches. Subject to regulatory approval, the transaction is anticipated to close in the first quarter of 2009. The integration for the 65 Indiana Charter One banking centers began in earnest in late November. As the Director of merger integration, I am leading the project office for this integration effort. A structured disciplined project management approach is being used for the project to coordinate all team tasks and communications. We are using a week-by-week calendar with milestone and specific required deliverables to organize our timeline. The integration activities involve 15 teams representing various functional areas of our company, such as retail administration, operations, information technology and human resource to name a few. One of the largest integration component is training over 350 new associates. We are accomplishing this task by training 58 associates every day for seven weeks. Additionally the planning for retrofitting 69 ATMs and outfitting 65 banking centers with wiring and equipment is being coordinated to work in concert with facilities, marketing, physical security and retail administration as they plan to ready the new centers for the changes coming in March. The teams meet weekly and report their progress at bi-weekly project leader meetings. The structured approach insures all necessary activities are being coordinated, linked and aligned across the organization. With the goal of March 21st, 2009 as the integration conversion day all teams activities are in full swing and all milestones are being closely monitored to track the progress of the project and verify we are on track with our due date. In closing, I echo Bob's earlier comments. All of our teams are exited to have such a talented professional group of associates joining our bank. I'd like to now turn the presentation over to Daryl Moore, our Chief Credit Officer.

Thank you, Julie I'd like to begin my part of this quarter's presentation reviewing the charge-offs for the quarter, as shown on slide 11 Charge-offs in the quarter was $13.4 million or 114 basis points of average loans. Increased losses were noted in both the commercial and commercial real estate business lines, as well as the retail lending area. In the commercial area losses were $4.6 million with 3.1 million of that write-down associated with a commercial lease that was written-off in full prior to year end. The velocity at which this borrower's financial condition deteriorated was astounding. As of June 30 2008, it exhibited cash flow sufficient to service all debt obligations. And by the December it had stop making payments and is currently being sued by multiple creditors. This unfortunately may be a reflection of the rapidly deteriorating economy; it could just be an indication of things to come. In the commercial real-state portfolio losses of $4.7 million were booked, with $3.2 million of those losses associated with the Indianapolis fraud incident identified in the first quarter of the year. Retail losses were elevated in the quarter at $3.9 million, which is roughly $1 million higher then third quarter retail write-downs. If you back out the losses associated with the Indianapolis fraud incident, the loss rate for the entire year was 46 basis points. If you recall our guidance in this area, as we began the year with 25 to 35 basis points. The provision for loan losses for the year totaled $51.5 million with charges-off of $40.8 million for the same period, the allowance for loan losses increased $10.6 million or 19% in 2008. As slide 12 reflects non-accrual loans fell slightly in the quarter from 1.46% to 1.34% of total loans. This represents $4.4 million in…

Thanks, Daryl. I'll begin on slide 24. Our net interest margin was 396 in the fourth quarter, up 17 basis point from our margin in the third quarter of 2008. At 396, our net-interest margin is 40 basis points higher than fourth quarter of 2007. For the full year 2008, our net-interest margin was 382, 54 basis points higher than our margin in 2007. Net-interest income increased $3.5 million from the third quarter 2008 driven by the improved margin and a $64.4 million increase in average earning assets during the quarter. Average loans increased to $18.2 million and the average investment portfolio increased $46.4 million during the quarter. Average commercial loans and leases were up $32.7 million for the quarter, while average commercial real estate loans declined to $14.1 million. Average commercial loans and leases were a $156.2 million higher in the fourth quarter 2008 than in the fourth quarter of 2007. Importantly average non-interest bank deposits increased $19.9 million and total average core deposits were up $28.2 million over the third quarter of 2008. Slide 25 shows the quarterly trend in our net interest income since the fourth quarter of 2005. Note the increase in fourth quarter 2008 net-interest income compared to the decline in net-interest income in the third quarter. As I said earlier average earning assets and core deposits grew and the mix of assets and funding improved during the fourth quarter. Additionally, we were able to reduce our deposit and wholesale borrowing costs in response to the dramatic decline in short-term rates during November, and December. Our trend in monthly net-interest margin on slide 26 tells a similar story to slide 25 for the fourth quarter of 2008. Net-interest margin was 3.75 in September 2008, and increased to 4.04 in December of 2008. As we told…

Thank you, Chris and Daryl. Before we take your questions I want to close our presentation beginning on slide 33 by providing you with insight into the significant drivers of our 2009 financial outlook. We will not be giving you our traditional earnings guidance because of the uncertainty surrounding the deteriorating economy and its potential effect on our credit portfolio. As you will see, we will be providing you with a wide range for our provision expense because of that economic uncertainty. And again, we do not feel we can give you more precise range at this time. On slide 33, there is a list of items that should impact our 2009 financial expectations. As we noted on our call regarding the acquisition of Charter One, we will incur one time cost of approximately $9 million related to the acquisition. In addition, like all banks, Old National banks, FDIC assessment will increase by approximately $5.8 million for the year. As Chris previously noted to you, we have restructured our BOLI investment. We successfully executed that transaction during the fourth quarter of 2008, and there will be a reduction in income from our BOLI investment of approximately $7.5 million for the year. Finally, the cost to capital through the direct capital purchase program is $5 million. Turning to slide 34; let me discuss the significant drivers of our 2009 financial performance beginning with the balance sheet. We see commercial loans and leases should grow at mid single-digit rate for 2009. We would define these as our C&I loans and small business loans. Total commercial loans should be flat for the year. The offset to our commercial loan growth is the planned continued decline in our commercial real estate loans. Total consumer loans should grow at low single-digit percentages. The growth opportunities…

(Operator Instructions). Your first question comes from the line of Scott Siefers with Sandler O'Neill.

Hey Scott. Scott Siefers - Sandler O'Neill & Partners LP: Good morning, everybody. Just had a few different questions. While I appreciate the provision guidance for '09 I'm just curious, if it would be comfortable suggesting how you guys see charge-offs comparing to the provision portfolio?

Scott, this is Daryl. We would think that charge-offs would be a little less than provision. In terms of guidance on charge-offs, we're going to be in a mid, probably 70 basis point range.

Scott, I would just carry on Daryl's comments. As we said in the opening, we see building the reserves as an important tool in 2009. Scott Siefers - Sandler O'Neill & Partners LP: Okay, perfect, thank you. And then Chris may be a little more color on the margin, I guess, given where the fourth quarter margin was versus the range which we have in for '09. Looks like we're sort of at the top end of the range currently. What kind of factors might be at play there that would potentially cause the margins to come under some pressure?

Scott as we've said that our improvements in margin have come from our ability to continue to lower our deposit rates relative to our peers, and the way the market has moved. We're probably as low as they can go on a relative basis just given where market rates are right now. That's probably the most important driver into 2009. Scott Siefers - Sandler O'Neill & Partners LP: Okay.

We do think we have got some ability Scott at the top end with our asset pricing, particular in the loan side to may be become a little more efficient. We are seeing more opportunities based on the disruption in the market place and we're able to get a little better pricing for the risk. Scott Siefers - Sandler O'Neill & Partners LP: Okay. And then I guess last question, probably also for you Chris. Just on the trust preferred and the unrealized losses that you guys have, and I guess with the nonagency CMOs as well. Just I guess given where we are today, what additionally would have to happen in your mind to potentially trigger an OTTI, and how does the market pricing ultimately factor into that decision for you guys as well?

Yeah, if you look the market values of those securities, they really haven't changed much since the third quarter, Scott and it's that same set of pool trust preferred securities that we're looking at fairly closely. I think, as I noted we have to look outward at possible deferrals in those pools and addition credit deterioration, and those will continue as we monitor those assets. And we do a pretty good job of looking deeply into those pools at the individual securities, and we also have engaged a third party to help us to evaluate those. So as we dig deeper into that collateral and watch the performance of the underlying securities in those pools, that's really what's going to dictate whether or not that happens. We do a pretty good job at it. Scott Siefers - Sandler O'Neill & Partners LP: Okay, terrific, thank you very much.

Thanks Scott. Operator: Your next question comes from the line of Erika Penala of Merrill Lynch & Company. Erika Penala - Merrill Lynch & Co.: Good morning.

Hey, Erika. How are you doing? Erika Penala - Merrill Lynch & Co.: I'm okay. My first question won't come as a surprise for Daryl. In terms of when you're looking at that 70 basis point charge-off number, what categories and I always appreciate specific comments such as, you've been, I am cautious on retail term CRE for a while. But, specifically what do you think will be the greatest contributors to either NPAs or charge-offs in 09?

I think charge-offs we would its easier probably to give definitively I think that charge-offs in the retail area are going to be higher without any question. It becomes a little more lumpy in the commercial and commercial real-estate, just simply because what large relationships might come on, what kind of losses we would have in those, that we really don't know today. So I think clearly retail is a big issue for us. The other driver for us, Erika in the provision is, we would expect to see as I said in my comments increases in criticized and classified, in our provision model those drive a fair amount of provision need. And so I think between the two of those you're seeing that larger than some might expect $40 to $60 million in expected provision. Erika Penala - Merrill Lynch & Co.: I think in the past you've talked about concerns in the C&I portfolio with business related to auto and in the term CRE portfolio, those with retail rent rolls right?

Right. Erika Penala - Merrill Lynch & Co.: Is there any other category within those two buckets that worry you, ex auto and ex retail?

I would say that we're beginning to see a little softness in the, not a lot, but little softness in the office, commercial real estate. That would be something that we're going to continue to watch pretty closely. We don't have much exposure and haven't done loans in the hotel motel industries for two or three years. That would be a segment that, what little bit we have remaining, would be a concern to me. On the commercial side right we have seen most of the deterioration some how associated with building. So it would be you're your lumberyards or such things, but we're seeing a spill over into transportation. And I would think generally we're going a see the lack of consumer spending touch most of those commercial customers that we have in some way or another. So when you looked at our special mention and classified increases in the C&I portfolio, they probably had the biggest jump this quarter. They had a bigger jump this quarter than what we saw in our commercial real-state. So we are beginning to see it spill over into that C&I portfolio. Erika Penala - Merrill Lynch & Co.: And switching over to deposit volume trends in the quarter, was there anything unusual going on or I guess what was behind your ability to attract that much volume even though you are able to rationalize your retail deposit costs very well?

You know I think Erika, it's as we've talked about for a while it's really the sales culture that our Banking Group has built. I think there's been a bit of a flight to quality from some of our depositors that are looking for banks that maybe aren't in the headlines as much as others. But really I would say it's the sales culture that Bob has built into the banking environment. Erika Penala - Merrill Lynch & Co.: And my last question, I guess I don't want to misread into the prepared comments, but in the past I think management has always been adamant about defending the dividend where it is and I don't know if I am reading this incorrectly but it sounds like even though we're in a completely different environment then even three months ago, that at least looking at the dividend is on the table. Is that a fair assumption to make?

Well it's a fair assumption I think it's prudent in our part to be always looking at it. I think our Board takes their fiduciary role very importantly. Saying that, we do feel we're well within the guidelines and as we look forward we just think it's quarter-by-quarter depending how bad the economy gets. I think the message is one, we want to be very prudent about it; two, we don't view TARP as part of that decision, that we really view tangible common as what will drive the decision for dividends in the future. And again as Chris said we are very comfortable in the range, and we are very comfortable as we look forward in our outlook but I think it's just prudent banking at this stage Erika Penala - Merrill Lynch & Co.: Okay. Thank you for taking my questions.

Thanks, Erika.

Your next question comes from the line of Mirsat Nikovic of Integrity Asset Management.

Hi there.

Good morning.

Good morning. How are you?

Good.

How do you guys... I know this is ways off, but how do you plan to pay back the TARP money?

Chris.

Yeah. You bring up a very important point. And I think the opportunities really to do that still haven't played out yet. But we, as Bob said it, we don't view TARP obviously as a part of our permanent capital structure. So as we look forward it's something we'll continue to look at, look at opportunities. But, I think the answer to that remains to be seen. It's something we're watching and continue to think about.

That's good.

Got it.

(Operator Instructions). Your next question comes from the line of David Darst of FTN Midwest.

Welcome, David. Glad to have you here.

Good morning. Thank you. Looking at the securities portfolio growth and then your expectations for the liquidity to increase from deposits coming into the first quarter, would you consider any of those purchases as kind of pre-purchase, taking advantage of the market in anticipation of this liquidity.

Right. That's a good catch, David. We certainly wouldn't expect our portfolio to increase at the same rate that we saw in the fourth quarter. The opportunities were there. We do know of course with the closing of the transaction in March that we will have close to $400 million in new deposits. But, the opportunities in the investment portfolio are very real, there is some good opportunities in the municipal securities market. So, we chose take advantage of those in the fourth quarter.

Should we assume that may be $200 million of additional securities growth or balance sheet growth in the first quarter, rather than the full amount?

Hard to say, I think we will get back to you on that. We've gotten ahead of it a little bit. We would expect it to be a component of our earning asset growth that Bob talked about, just given the outlook and steepness of the curve all of those things that make investment portfolio assets on a relative basis pretty attractive right now.

Okay. And then I guess, beyond the first quarter, would we expect to see the balance sheet relatively stable to declining as you redeploy that liquidity?

I think that's fair, again with the numbers that Bob provided in his guidance, you get a feel that the new funding from the branches, the acquisition will be an important part of our funding going forward. It's an element of the funding mix. We don't necessarily expect that that will drive significant increase in size of our balance sheet.

Okay. And, where is your accrued, your TARP dividend? I didn't see it broken out.

Yeah, I don't know if 2you have your trends sheet spread. It was such a small portion, I think it was only two hundred some thousand for the quarter because we didn't get the money till mid-December.

Right.

We're going to do a better job of breaking that out in our trends as we go forward. But, it is on the trends in terms of in the retained earnings area.

Okay.

We'll break it out better as we talked about in my presentation, a little more transparent that given those were only couple of hundred thousands for the quarter, it didn't really matter.

It won't be so, next quarter. Okay.

Much more material, next quarter.

And the Charter One, one time expenses. Will those be broken over several quarter or those will all occur in the...

The vast majority of those will be first quarter expenses.

Okay.

And it's important as you're building a models, so those would be first quarter expenses and then some return to normalcy from there. If you remember, in our Charter One presentation, we viewed Charter One as basically flat earnings after the one time expenses.

Okay, thanks.

Your next question comes from the line of Eileen Rooney of KBW.

Good morning, Eileen. Eileen Rooney - Keefe Bruyette & Woods Inc.: Good morning, everyone. A quick question on the tax rate; it looks like you guys used some tax credits this quarter. I am just wondering if you had any left and also what you expected for the tax rate in 2009?

Well, I think the biggest drive of our tax expense this year was our first quarter recovery; probably in to 2009, it's really mix of assets and the components of taxable income verses income that's not taxed. Depending on where we land in the range of provision expense, you could probably expect to see a tax rate in that 12% to 15% range -- 10 to 15% range, Eileen. Eileen Rooney - Keefe Bruyette & Woods Inc.: Okay, and this quarters tax rate. What was going on there that negative %2.5?

It's really driven by the large provision. Just the impact on reported taxable income. Of course it really becomes a credit, a deferred tax asset, subject... of course it will be subject to AMT. Does that help, Eileen. Eileen Rooney - Keefe Bruyette & Woods Inc.: I guess, okay. That's just because you had non taxable interest income.

Right, right. Yeah, we've have always had a pretty high percentage and of course as you've seen our effective tax rates historically have been pretty low. Eileen Rooney - Keefe Bruyette & Woods Inc.: All right, Okay.

Thank you.

Your next question comes from the line of Brian Hagler of Kennedy Capital.

Good morning, everybody. Appreciate the detail you have in the slides. I was just hoping to get a little more comment on the Indianapolis market, which I guess with the fraud was a little over 60% year of your NPAs and without, it is still about 40%. Is that just because you have more retail and commercial real estate there or is it just one of your maybe weaker markets?

Yeah, I think if you look at the Midwest, Indy would be a market that would more resemble Ohio or Michigan in terms of got a little overheated and they're starting to pay for that a little bit, particularly as you look at housing, both on apartments and residential. And I think you're seeing the affect on those builders as well as on their suppliers. So it's really just... it's the most challenging market we have an economic standpoint right now.

I'm assuming that obviously accelerated the stress on that market, accelerated this quarter.

It has, as you look back on our call, as we've always said that's a market where we're concerned with, even absent the fraud because again, those that go up very fast tend to come down and those are pretty steady stay steady and Indy's again one of those markets in the Midwest you have to keep your eye on. Now saying that we're still very committed to the market.

All right, okay thanks Bob.

Thanks Brian.

There are no further question at this time. Ladies and gentlemen, do you have any closing remarks.

Well, no just thank you for your time and diligence. And as always our new Senior Vice President of Investor Relations is available to answer your calls, and we'll get right back to you. Thank you very much.

This concludes Old National's call. Once again a replay along with the presentation slides will be available for twelve months on the Investor Relations page of Old Nationals website at www.oldnational.com. A replay of the call will also be available by dialing 1800-642-1687, conference id code 801-27-832. This replay will be available till February 9th. If anyone has additional questions, please contact Lynell Walton at 812-464-1366. Thank you for your participation in today's conference call. You may now disconnect.