[Management View]
Old National Bancorp reported strong sequential and annual growth in adjusted earnings per share for Q2 2025, driven by the early closing and integration of the Bremer partnership. The company exceeded previous guidance, focusing on balance sheet growth, fee-based business improvement, and expense control. The Bremer acquisition was completed ahead of schedule, enhancing capital and earnings positions.

[Outlook]
Management expects full-year 2025 EPS to align with consensus estimates, projecting organic loan growth at the lower end of the 4%-6% range due to competitive and geopolitical factors. The Bremer systems conversion is on track for mid-October, supporting operational integration.

[Financial Performance]
- GAAP EPS for Q2 2025 was $0.34; adjusted EPS was $0.53, reflecting an 18% sequential and 15% year-over-year increase.
- CET1 ratio improved to 10.74%, and tangible book value per share rose by 14% YoY.
- Core deposits increased by $11.6 billion, with organic loan growth at 3.7% annualized, excluding Bremer.

[Q&A Highlights]
Question 1: Can you comment on client sentiment and the cautious loan growth outlook?
Answer: Management noted increased competition, particularly in commercial real estate, leading to a cautious outlook. Despite this, C&I growth was strong, and client sentiment showed cautious optimism, with economic optimism rising.

Question 2: Can you explain the linked quarter increase in NPAs?
Answer: The increase was primarily due to the Bremer acquisition. NPAs as a percentage of the balance sheet decreased slightly, indicating stable credit quality.

Question 3: What is the spot rate on loans or bonds?
Answer: The spot rate for securities was seven basis points higher, and for loans, five basis points higher than recorded. New money yields were approximately 6.8% for loans and mid-fives for securities.

Question 4: Is a share buyback expected this year?
Answer: Management is focused on building capital and completing the Bremer conversion. A share buyback is on the horizon but not imminent.

Question 5: What does the deregulatory environment mean for Old National?
Answer: The environment is constructive, with positive relationships with regulators. Management is focused on organic growth and not pursuing new deals until the regulatory landscape is clearer.

Question 6: What is meant by active portfolio management and the characteristics of CRE loans planned for sale?
Answer: Active management involves reducing classified and criticized loans through payoffs and refis. The $2.4 billion in CRE loans aligns with Old National's underwriting standards.

Question 7: Can you discuss the fee income outlook?
Answer: Fee income strength is driven by mortgage, wealth, and capital markets. The outlook remains positive, with no significant changes expected in the second half of the year.

[Sentiment Analysis]
Analysts and management maintained a constructive tone, with management expressing confidence in strategic initiatives and credit quality. Analysts were interested in understanding the cautious loan growth outlook and capital deployment strategies.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | YoY Change |
|---------------------------------|---------|---------|------------|
| GAAP EPS | $0.34 | $0.29 | +15% |
| Adjusted EPS | $0.53 | $0.45 | +18% |
| CET1 Ratio | 10.74% | 10.47% | +0.27% |
| Tangible Book Value Per Share | +14% YoY| | |
| Core Deposits Increase | $11.6B | | |
| Organic Loan Growth (Annualized)| 3.7% | | |

[Risks and Concerns]
- Increased competition in the commercial real estate market.
- Uncertain geopolitical environment affecting loan growth.
- Integration risks associated with the Bremer acquisition.

[Final Takeaway]
Old National Bancorp demonstrated robust financial performance in Q2 2025, bolstered by the Bremer partnership. The company is well-positioned for the remainder of the year, with strong capital ratios and strategic growth initiatives. Management remains cautious about loan growth due to competitive pressures but is optimistic about client sentiment and fee income prospects. The focus remains on completing the Bremer integration and maintaining disciplined expense management.