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Old National buying Indiana Community for $79M

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Old National Bancorp. agreed to acquire Columbus-based Indiana Community Bancorp. for $79.2 million in stock, the companies announced Wednesday morning.

Evansville-based Old National will absorb the 20 branch locations Indiana Community operates, including three on the southern edge of Indianapolis. The company, which operates under the name Indiana Bank & Trust, has nearly $985 million in assets.

Indiana Community was hit last year by some sour Indianapolis real estate investments, which forced it to set aside $14.1 million for loan losses in its third quarter, compared with just $1.6 million in the same quarter the year before. The bank lost $5.8 million in the quarter.

Old National is the largest bank headquartered in Indiana, with $8.9 billion in assets and more than 180 branches. The acquisition of Indiana Community, which still requires the approval of shareholders and state and federal regulators, would help it broaden its geographic reach.

"It also allows Old National to expand our service area into a vibrant, growing region,” said Old National CEO Bob Jones in a prepared statement, “and enables Indiana Bank and Trust Co.'s loyal client base to continue doing business with a community-focused, Indiana-based financial institution with a very similar culture and values."

Indiana Community CEO John Keach said the merger with Old National would enhance the bank’s products and services, as well as rewarding shareholders.

The purchase price values Indiana Community at $22.80 per share—a 57 percent premium to the company’s closing price on Tuesday.

Indiana Community shares soared in Wednesday morning trading, rising by as much as 47 percent, to $21.34 apiece.

Old National stock fell 3.4 percent Wenesday morning, to $11.96 per share.

The banks said they expect the merger to close in the second quarter.

In 2008, Indiana Community had accepted $21.5 million in government funds through TARP, or the Troubled-Asset Relief Program, and issued an equivalent amount of preferred stock. Old National said it intends to redeem that preferred stock before completing its merger with Indiana Community.

 

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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