Evansville-based Old National Bank plans to close 13 of its branches in the Indianapolis area on Aug. 23 as part of a push to streamline operations and save money.
The 13 Indianapolis branches are all located within larger retail operations, such as Kroger and Marsh supermarkets, said Randy Reichmann, president and CEO of Old National’s Indianapolis region. Old National is the largest bank headquartered in Indiana.
The closures are expected to affect 40 to 45 employees, who will be considered for other positions at the 27 remaining Old National branches in the Indianapolis area, Reichmann said. Those who are not retained will receive a severance package.
“Our goal is to impact as few associates as possible,” Reichmann said.
The move comes on the heels of a decision in 2012 to close nine other branches in the Indianapolis area. Several banks have closed bricks-and-mortar locations in Indiana in recent years as part of a national trend toward online banking.
“We’re not vacating Indianapolis,” Reichmann said of the most recent wave of closures. ”We’re just becoming a little more efficient. ... We love Indianapolis and we’re not going anywhere.”
Parent firm Old National Bancorp expects to close 18 branches in Indiana altogether in the third quarter of this year, according to a May 23 filing with Securities and Exchange Commission. The move would result in an additional $3.5 million to $4.5 million annually in pre-tax income for the company.
All 13 of the Indianapolis branches targeted for closure were a part of the Charter One system acquired by Old National Bancorp in 2009, Reichmann said. Leases on most of the branches were coming due for renewal, which factored into the bank’s decision to close them.
Old National officials also looked at size and profitability of the branches, and whether customers could comfortably switch to another nearby branch. “It’s kind of a puzzle that we put together,” Reichmann said.
Customers of the affected branches soon will receive notices of the closures.
Old National is the fourth-largest bank in the Indianapolis area, in terms of local full-time employees. In 2012, the bank had 447 workers at 50 locations in the area, according IBJ research. It counted $773 million in local deposits as of June 30, 2012.
The 18 closures statewide will leave 152 Old National branches in Indiana. By the end of 2013, the bank plans to integrate 24 branches in northern Indiana acquired from Bank of America Corp.
Old National also operates in Kentucky, Illinois and Ohio.