About 50 local professional jobs have been eliminated in Old National Bancorp’s acquisition of Columbus-based Indiana Community Bancorp.
Old National’s chief executive said the positions were no longer necessary because employees at Old National’s headquarters in Evansville already were performing those duties.
An investment analyst said such job losses are typical in an acquisition.
ICB was the parent company of Indiana Bank & Trust Co. Old National’s acquisition of ICB was completed last week. Signs at bank branches changed last weekend.
Bob Jones, president and chief executive officer of Old National, said the vast majority of the 50 people who were let go, including five part-timers, performed finance, technology and other behind-the-scenes functions that were a duplication of work being done at the Evansville headquarters.
Jones said Old National provided the employees who lost their jobs with job counseling and help with resumes and interviewing.
Most of the branch employees, especially those with direct customer contact, have kept their jobs, Jones said, in part because Indiana Community Bank and Old National Bank had very little geographic overlap. Only two IBT locations, in Brownstown and Greenwood, were closed because of nearby Old National branches.
Craig Kessler, president and chief investment officer of Columbus-based Kessler Investment Group, said companies typically try to reduce costs when they acquire other firms and that usually involves job cuts.
He also said, however, that the IBC job-loss impact on Columbus likely would be small because other banks, including First Financial and MainSource, have expanded their presence in Columbus since the demise of Irwin Financial in 2009.
Kessler, who owns shares of First Financial, said industry and economic trends are prompting community and regional banks to grow through acquisitions.
The economy is recovering slowly, loan demand continues to lag behind historic highs, and banks are focusing on increasing assets and reducing costs, Kessler said. Old National’s strategy also has involved acquisitions of Integra Bank and Monroe Bancorp in 2011.
Jones said Old National will continue to look for acquisitions in Indiana, but also in nearby states.
Meanwhile, Jones said conversion of Indiana Bank branches to Old National branches, which took place last weekend, has gone smoothly.
The Columbus branches saw heavy foot traffic on Monday, but Jones said customers mainly wanted to make sure that their debit and ATM cards still worked and that they could bank with the same people they have known for years.
Once customers realized it was business as usual, they left reassured, Jones said.
He also said that Old National has been pleased with the reception it has received in Columbus and looked forward to making a difference in the community.
Old National encourages employees to spend two hours a month on company time working to improve their communities.
Old National Bancorp, now with about $10 billion in assets, is the largest financial services holding company based in Indiana. Indiana Community Bancorp had assets of about $1 billion.
The acquisition of ICB, following the failure of Irwin Union Bank, marked the end of Columbus-based banks.
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