IBJNews

Cost cutting planned by Integra Bank's new owner

Back to TopCommentsE-mailPrintBookmark and Share

The leader of the bank that has taken over the failed Integra Bank expects to cut about 75 percent of its operational costs over time.

Old National Bank President Bob Jones said an undetermined number of jobs will be eliminated, with the bulk of them being branch managers and other management positions. Old National executives met Sunday afternoon with about 350 Integra employees at Evansville's convention center to discuss the takeover.

Federal regulators shut down Evansville-based Integra Bank on Friday. Old National Bank and the Federal Deposit Insurance Corp. agreed to share losses on $1.2 billion of Integra Bank's loans and other assets.

Jones told the Evansville Courier & Press that over the next month Old National will consider consolidations with Integra's 52 branches in southern Indiana, southern Illinois and western Kentucky.

"Obviously, we've got branches that are right across the street from the Integra locations," Jones said. "We've got redundant functions, and so we talked a little bit about how the transition will go and when we'll make decisions and how we'll communicate those."

Integra's failure ended an effort by the CEO, longtime Indianapolis banker Mike Alley, to turn around the ailing institution.

Regulators also shut down a bank in Virginia and and a bank in South Carolina, boosting to 61 the number of U.S. bank failures this year.

Integra had 52 branches (none in central Indiana), $2.2 billion in assets and $1.9 billion in deposits. Evansville-based Old National Bancorp, the largest Indiana-based banking company, won a FDIC auction for Integra and was assuming $1.5 billion in deposits and $1.2 billion in loans.

All Integra branches were closed Friday afternoon by the Comptroller of the Currency and the FDIC was named receiver. They will reopen as Old National branches.

Integra is the largest bank failure in Indiana since regulators seized Columbus-based Irwin Union Bank in 2009.  That institution, which was taken over by Cincinnati-based First Financial Bancorp, had $2.7 billion in assets.

Alley, head of Fifth Third Bancorp's central Indiana operations in the 1990s, has been on the board of Integra's parent, Evansville-based Integra Bank Corp., since April 2009. Just a month later, with the bank’s finances worsening, directors tapped him as chairman and CEO, putting him in charge of executing a turnaround.

He acknowledged late last year that righting the bank had been much tougher than he expected. Many of its problems stemmed from an aggressive expansion into commercial real estate lending, a segment that was decimated when the financial crisis hit in 2008.

Jones and other Old National staffers handed out doughnuts and answered customer's questions at the former Integra branches after they reopened Saturday.

Integra Bank received $83.6 million in taxpayer money in 2009 under the government's financial bailout program, Treasury Department data show. That money hasn't been repaid, according to the Treasury data.

The bank recently had been trying to raise fresh capital and sell non-essential assets as it struggled under the weight of souring loans for commercial real estate and land development.

Some Integra customers said they didn't even know about the change until they walked into the branch and saw an Old National Bank logo on the wall.

Brian Paris, 40, of Poseyville said he knew Integra was facing problems, but had hoped the situation would have different solution. However, he said he planned on keeping his account with Old National.

"It's kind of sad because I've been banking here for a while, I wish they could have done something to prevent them for going under," Paris said.

ADVERTISEMENT

  • Kindergarten management
    This is a perfect example of negligent arrogant management at its best. This group of people took a bank that had a reputation in the community second to none. For decades providing families and business with sound financial advise and resources in a responsible manner. All to be turned into a fly-by night operation of huge overpaid executives that cared more about their own personal gain than their responsibility to the community. Shame on you

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

ADVERTISEMENT