Old National Bancorp (ONB) M&A Announcement summary

Deal rationale and strategic fit

• Expands presence in the Upper Midwest, especially the Twin Cities, making the combined entity the third largest bank in Minneapolis-St. Paul and a premier Midwest regional bank.

• Enhances deposit base, wealth management, and commercial banking capabilities, supporting continued organic growth and broader banking resources for customers across Minnesota, North Dakota, and Wisconsin.

• Leverages complementary business models, similar credit standards, and a community-focused culture, supporting a seamless strategic fit.

• Partnership with Otto Bremer Trust supports community investment, philanthropic initiatives, and unlocks growth potential for Bremer, previously constrained by trust ownership.

• Aligns with Old National’s M&A strategy to deliver attractive returns and shareholder value.

Financial terms and conditions

• Aggregate consideration of $1.4 billion: 4.182 shares of common stock plus $26.22 in cash per Bremer share; $315 million (22%) paid in cash.

• Pro forma ownership: ~81.6% ONB, ~12.8% Bremer, ~5.6% new shareholders; Otto Bremer Trust will hold about 11% and gain a board seat.

• $400 million common equity offering priced at a 3% discount to the prior closing price, with forward settlement mechanism.

• Transaction priced at 1x tangible book value and 6.1x 2025 earnings, inclusive of cost savings.

• The transaction was unanimously approved by both companies' boards and is expected to close mid-2025, subject to regulatory and shareholder approvals.

Synergies and expected cost savings

• Projected 30% cost savings, net of investments, or ~$111 million pre-tax, with 25% realized in 2025 and full run rate in 2026.

• Cost savings to come from personnel, IT, contracts, and professional services.

• Revenue synergies expected but not included in projections.

• One-time pre-tax merger expenses of ~$194 million.

• Synergies include leveraging a larger balance sheet and product suite across the expanded client base.