Magazine article American Banker

Old National, Old Kent Have In-Market Acquisition Deals

Magazine article American Banker

Old National, Old Kent Have In-Market Acquisition Deals

Article excerpt

Two Midwestern banks announced separate acquisitions Friday to expand their footholds in key markets.

In the larger of the two deals, Old National Bancorp of Evansville, Ind., said it would acquire ANB Corp. of Muncie, Ind., in a $212.4 million stock swap.

The merger would create Indiana's largest banking company, with $7.7 billion of assets and 143 branches. Old National also operates nearly 50 branches in Illinois and Kentucky.

In the other deal, Old Kent Financial Corp. of Grand Rapids, Mich., announced it was buying Merchants Bancorp in Aurora, Ill., for $189 million in stock. Both deals are expected to close early next year.

The acquisition would boost Old Kent's assets to nearly $18 billion and comes on the heels of the company's July 9 purchase of $900 million-asset CFSB Bancorp in Lansing, Mich.

The company also has another pending acquisition of Pinnacle Banc Group Inc., a $1 billion-asset company based in Oak Brook, Ill.

"They should change their name from Old Kent to Clark Kent because this company is really just Superman in disguise," said Anthony Polini, an analyst with Advest Group Inc. in New York.

"This is just another fantastic deal that they should be able to derive real benefits from."

Combined with its other holdings in the Chicago area, this deal for Merchants would improve Old Kent's deposit share to sixth in the state.

Old Kent also expects annual pre-cost tax savings of $9 million, which is about 30% of Merchants' expense base.

"That's well in line with what they can achieve in the Illinois market given their other acquisitions there," said Michael Moran, an analyst with Roney & Co. in Detroit.

Mr. Moran said he expects his company to increase Old Kent's per-share earnings estimates by as much as 5 cents in 2000, from its current $2. …

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