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Old National Bancorp's purchase of Integra Bank, its largest competition, is not your usual FDIC failed bank deal, and could be considered subtraction by addition.
August 1
Old National Bancorp (ONB) in Evansville, Ind., will sell or close 27 branches as part of ongoing efforts to cut costs.
The company has already agreed to sell nine branches with roughly $174 million in deposits. The transactions exclude loans held at those branches.
Old National will sell five branches in western Kentucky to the $668 million-asset Planters Bank in Hopkinsville, Ky. The branches have $93.7 million in deposits that will change hands at a 2.53% deposit premium.
The $243 million-asset Legence Bank in Eldorado, Ill., will buy two Old National branches in southern Illinois with $46.3 million of deposits and at a deposit premium of 1.11%. Also, the $66 million-asset Area Bank in Rosiclare, Ill., will buy two other branches with about $33.5 million of deposits in southern Illinois for a 0.3% deposit premium.
Old National also said it will close 18 branches: nine around Indianapolis, five in central Indiana and four in southern Indiana.
Old National's expense base has long been a concern for investors and analysts. The company's management
Last year, the $8.7 billion-asset company
Old National said that it had reviewed the market dynamics, deposits per branch, proximity to other branches and client traffic as part of its efforts to improve efficiency. Half of the closures are Indianapolis in-store branches with leases expiring soon; these locations will be consolidated into nearby branches.
The company expects no layoffs from the changes. Old National has 183 branches in Indiana, Kentucky and Illinois. The closures and sales are expected to happen late in the fourth quarter or early in the first quarter of 2013.