Old National Bancorp, the largest financial services company headquartered in Indiana, said Wednesday that it has agreed to buy Lafayette’s biggest bank for $42 million.
Evansville-based Old National said the purchase of LSB Financial Corp., parent of Lafayette Savings Bank, will add $366 million in assets and five branches.
Old National in recent years has been aggressively bulking up its Indiana presence. In September, it agreed to buy Fort Wayne-based Tower Financial Corp. for $108 million.
Old National is paying cash and stock worth $41.67 for each LSB share—well above the stock’s $28.30 closing price on Tuesday. LSB shareholders rejoiced at the hefty premium, sending the bank’s shares up 41 percent, to $39.52, in late-morning trading Wednesday.
The purchase “continues Old National’s path of regional expansion by more than doubling our presence in the Lafayette market,” Old National CEO Bob Jones said in a prepared statement.
Old National, with $9.5 billion in assets, ranks among the 100 largest banks in the United States. In addition to Indiana, it has offices in western Kentucky, Louisville, southern Illinois and southwestern Michigan.