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.