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MainSource Bank, based in Greensburg, has purchased a bank branch in Hope from the larger Old National Bank of Evansville.
The deal gives MainSource an existing branch at 8475 N. State Road 9 in Hope and roughly $4 million in loans and $25 million in deposits. Also included in the agreement were the deposits associated with an Old National location in Greensburg.
Old National and MainSource officials expect the acquisition to become final in December after bank regulators review it. Once approved, the sale will boost MainSource’s presence in Bartholomew County, where it currently operates four full-service offices.
“Hope provides a natural extension of our footprint and will provide an added benefit for customers in the Bartholomew, Decatur and Shelby county markets,” said Archie M. Brown Jr., MainSource’s president, CEO and chairman. “In addition, it allows the residents of Hope and surrounding areas to continue banking in their local community while having the convenience of additional MainSource Bank locations in close proximity.”
Daryl Tressler, chief banking officer at MainSource, said customers in Hope and Greensburg will be notified of the impending sale — and how it will affect their accounts or loans — via a joint letter from both banks later this month.
Tressler said he anticipates retaining a high percentage of the business from customers in both locales. MainSource will assume a lease on the Hope bank branch, which is located in a strip retail center on the east side of State Road 9. MainSource is getting accounts but not a physical location in Greensburg.
MainSource will get about $20 million worth of deposits in Hope and $5 million in Greensburg, he said.
“This gives us a chance to expand our market share in Bartholomew County; and when we’re done, we will be the only bank with a presence in Hope,” Tressler said.
Old National has $9.6 billion in assets and is three-and-a-half times the size of MainSource. It operates in four states: Indiana, Illinois, Kentucky and Michigan. Two months ago, it acquired 24 branches from Bank of America in northern Indiana and southwestern Michigan.
This week Old National also sold a branch in Osgood to River Valley Financial Bank.
The moves by Old National come on the heels of a solid second-quarter earnings report in which the lender said its net income increased 4.7 percent compared to a year earlier and loans increased by 1.5 percent.
Bob Jones, Old National’s president and CEO, said Friday that his bank sold assets in Hope, Greensburg and Osgood because it prefers to concentrate its business in markets where it has a deeper concentration of branches and customers.
“We sold to partners that can offer more branch servicing and support to the customers in those markets,” Jones said.
For the economy as a whole, Jones said, he thinks the gross domestic product will grow at a modest rate in the second half of the year.
“I would say the second quarter is symbolic of what we’ll see over the next two quarters. We have actually seen recovery in loan volume and the economy. A wild card is if the Federal Reserve begins to reduce their bond buyback. Interest rates will rise, and that could slow the recovery a little bit,” Jones said.
Meanwhile, MainSource said last month its net income for the second quarter increased 4.9 percent to $7.3 million, or
35 cents per share, compared with $6.98 million, or 32 cents per share, a year earlier.
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