John Rob

John Rob, on behalf of Jared Shaw, inquired about the Net Interest Income (NII) outlook following the Bremer acquisition, specifically asking if better day-one capital implies less accretion. He also questioned if the 40% deposit beta guidance includes Bremer and sought a normalized run-rate for other fee income.

Answer

Executive James Ryan clarified that the 2025 guidance still uses original M&A assumptions, including a $2.4 billion loan sale. He noted that higher day-one capital will likely reduce the size of this sale, offsetting lower purchase accounting accretion. He also confirmed the 40% deposit beta guidance is for core Old National only, with more room for cost reductions. For other fee income, he advised backing out one-time gains of approximately $8 million from Q4 and $5 million from Q1 to establish a clean run-rate.

John Ron, on for Jared Shaw, asked for the portion of the securities book that is floating rate, any differences in spreads on new 2025 loan growth versus 2024, and the outlook for the size of the mortgage servicing portfolio.

Answer

Interim CEO Dale Gibbons stated that 15% of the securities portfolio is floating rate. He and Chief Banking Officer Timothy Bruckner noted they continuously seek the best risk-adjusted returns across categories like lot banking. Gibbons and Chief Banking Officer Stephen Curley explained the MSR portfolio size should remain relatively flat, as it is replenished over a few months after block sales.