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UPDATE: Old National calls acquisition a bargain

November 25, 2008

Old National Bancorp has agreed to buy 65 Charter One bank branches, including 51 in Indianapolis, for about $16 million.

The price was compelling in part because the bank normally would pay about $3 million each for new branches in Indianapolis, said Bob Jones, CEO of the Evansville-based bank, the largest headquartered in Indiana.

Most of the bank branches are within Kroger, Marsh and Wal-Mart stores. Six of the locations in the Indianapolis area are traditional bank branches.

"In our current evolution as a company, this deal makes a lot of sense," Jones said. "It gives us a great distribution in Indy and other markets. It gives us a lot of billboards, it gets our name out."

In the deal, Old National gets about $400 million in deposits and $15.9 million in loans. The bank did "a very robust due diligence" to ensure the quality of the loan portfolio, Jones said.

The Charter branches employ about 360 people, including 15 commercial lenders. The bank is part of the Royal Bank of Scotland Group Plc.

Old National still has not decided whether to accept funding from the U.S. Treasury's TARP program, and its purchase of Charter's branches does not hinge on accepting the funds.

Old National shares rose 9 cents, to $17.12, in morning trading.

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