No branch offices in Bartholomew County will close as a result of the merger of two Midwestern banks.
The Board of Governors of the Federal Reserve System on Thursday approved the merger of Greensburg-based MainSource Financial Group into Cincinnati-based First Financial Bancorp.
MainSource and First Financial announced merger plans in July. The official closing of the transaction, valued at $1 billion, is scheduled for April 1, when the two banks legally will become one.
Post-merger, the financial institution will have about $14 billion in assets. First Financial shareholders will own 63 percent of the company, MainSource shareholders 37 percent after the merger.
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“We are extremely pleased that the final step of merging our two banks is now a reality. The integration process is underway and we are excited to continue the First Financial brand as a combined financial institution to better serve our clients and communities,” said Claude E. Davis, president and chief executive officer of First Financial.
The conversion of MainSource’s operating systems to First Financial’s, and the rebranding of branches, is targeted for the Memorial Day weekend, but could happen a bit later if extra time is required, said Archie Brown Jr., MainSource’s chairman, president and CEO.
With MainSource announcing that four of its Columbus branches would be sold to a third banking company, none of the remaining First Financial or MainSource branches in Bartholomew County will be closed as part of consolidation efforts, Brown said.
MainSource customers will receive information prior to the conversion about changes to their debit cards and passwords for online banking, Brown said.
Sale of branches
Before the conversion occurs, MainSource wants to complete the sale of five branches — including four in Columbus — to Jasper-based German American Bank as part of an agreement with the U.S. Department of Justice.
The branches being sold are:
Columbus downtown, 529 Washington St.
Columbus north, 1901 25th St.
Columbus west, 2310 W. Jonathan Moore Pike
Columbus drive-through, 803 Washington St.
Greensburg Plaza, 304 E. 10th St.
German American said the branches are a good fit for their business and growth plans, and fulfills the bank’s expansion goal in the Columbus market — where it had one branch already — in one transaction. All of those branches will remain open.
About 25 MainSource employees, including about 20 in Columbus, will become employees of German American as a part of that transaction.
The sale of the branches, announced Feb. 13, is required because of federal rules about monopolies and competition, which set limits on the concentration of deposits by one banking company in one market. An agreed sale of the branches to a buyer was required before federal approval of the merger could be granted.
“We’re pleased that it came through quickly after the (Department of Justice) agreement,” Brown said of federal approval of the merger.
Converting the five branches to German American’s operating system before MainSource’s conversion into First Financial is important so the branches don’t go through the process twice, Brown said.
More branches impacted
First Financial and MainSource have other steps to take to complete the merger process.
In July they announced that 45 to 50 branches would be closing in a consolidation process because of overlap in their markets, and that about 17 percent of the 2,400 combined jobs at the two banks, about 400 positions, would be eliminated.
The branches being sold to German American are no longer eligible for consolidation, and 15 branches between the two banks — seven by MainSource this year and eight by First Financial last year — already have been closed, Brown said.
Of the 15 branches that closed, the closest to Bartholomew County was one in Westport, at 102 Underwood Drive. Of the others, four were in Ohio, one in Kentucky and the rest stretched across Indiana from Crown Point, Fort Wayne and Fishers to Clarksville and Madison.
Another 26 branches have been identified internally for closure, but which ones won’t be released publicly until customers have been notified, which could be within the next week or two, Brown said.
With the sale of the four MainSource branches in Columbus, the banks’ remaining Bartholomew County offices will stay open after the consolidation process. MainSource has one branch in Hope and one in the Edinburgh/Taylorsville area, but First Financial does not. First Financial has four branches in Columbus:
125 Third St., Columbus
707 Creekview, Columbus
3950 Jonathan Moore Pike, Columbus
2531 Eastbrook Plaza in Columbus
“We have a lot of business in Hope and around Taylorsville, and they have four very strong banking centers in Columbus. So, we’ll keep them all,” Brown said.
MainSource employees were notified in November and December about the status of their jobs after the merger is completed, Brown said. Some jobs are being eliminated and others moved to different locations, because of current duplication of efforts in the market, he said.
Attrition is expected to take care of a portion of the staffing reduction, and some employees have already left for other jobs, Brown said.
“By the fourth quarter of this year, we should be at the staffing level we expected to be at,” Brown said.
Some employees in critical roles are being offered incentives to stay through the conversion or even a few months afterward because of a lot of work that will be required to perform, Brown said.
Discussions of a merger between First Financial and MainSource began in late winter 2016, and took root when Brown and Davis met for one of their periodic lunch meetings. They said they soon realized that combining forces made sense for their two companies’ needs and futures.
MainSource sought a greater presence in metro markets, and the merger accelerates that process five to 10 years, Brown said in July.
As a merged, larger bank, First Financial can better absorb costs related to steeper financial and regulatory impact that the bank was anticipating because of its growth, Davis said in July.
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2016
Winter: First Financial Bancorp president and CEO Claude Davis and MainSource Financial Group Chairman, President and CEO meet and discuss the possibility of a merger between the banks, both of which have Bartholomew County presences.
2017
July: The banks officially announce plans for Greensburg-based MainSource to merge into Cincinnati-based First Financial.
December: First Financial closes eight branches — four in Ohio, three in Indiana and one in Kentucky as part of previously announced plans to close 45 to 50 branches to eliminate overlap in markets.
2018
Jan. 5: MainSource closes seven branches in Indiana, including one in Westport.
Jan. 25: MainSource and First Financial reach an agreement with the U.S. Department of Justice for MainSource to sell four branches in Columbus and one in Greensburg to meet federal rules about monopolies, competition and concentration of deposits by one bank in one market. The sale of the branches is a requirement for the merger to proceed.
Feb. 13: Jasper-based German American Bancorp agrees to purchase the five MainSource branches that were marketed for sale, allowing MainSource’s merger into First Financial to proceed.
Feb. 22: First Financial and MainSource receive approval for the merger from the Board of Governors of the Federal Reserve System.
April 1: Schedule closing date for the merger.
Late May: Target date to convert MainSource operating systems into First Financial’s.
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