EVANSVILLE – Evansville-based Old National Bancorp and Lafayette-based LSB Financial Corp. together announced an agreement under which Old National will acquire LSB Financial through a stock and cash merger.
With $366 million in total assets and just over $312 million in deposits, LSB Financial is a savings and loan holding company with Lafayette Savings Bank as its wholly-owned subsidiary. The largest bank headquartered in Lafayette, Lafayette Savings Bank currently operates five full-service banking centers in Tippecanoe County, which is home to Purdue University and a high-tech manufacturing sector.
Founded in Evansville in 1834, with $9.5 billion in assets and 166 branches, including one in Warsaw after the company’s acquisition of Tower Financial, Old National is the largest financial services holding company headquartered in Indiana and the fourth largest deposit holder in the Hoosier state, according to the announcement.
“This partnership continues Old National’s path of regional expansion by more than doubling our presence in the Lafayette market, and it also marks the union of two like-minded banks with outstanding legacies of client service and community engagement,” said Old National President and CEO Bob Jones in the announcement. “By acquiring the community bank in Tippecanoe County, Old National is reinforcing our standing as the Indiana bank and one of the leading community focused banks in all of our markets.”
Randolph F. Williams, president and CEO of LSB Financial, said in the announcement, “Old National is an established, well-managed company that is truly Indiana’s bank; they care about the people in the markets they serve. This partnership is in the best interests of our shareholders who will become part of a larger and growing institution. Our board believes that the best way to advance our long-standing commitment to the Lafayette community is to partner with a larger institution that has demonstrated commitment to our values, is respectful of our history, and has the ability to grow opportunities for our community, customers and employees. I’m looking forward to working with Bob and his team to establish this partnership.”
Under the terms of the merger agreement, which was unanimously approved by the boards of both companies, shareholders of LSB Financial will receive 2.269 shares of Old National common stock and $10.63 in cash (fixed) for each share of LSB Financial common stock. Based upon the June 3 closing price of $13.68 per share of Old National common stock, the transaction is valued at approximately $41.67 per share of LSB Financial common stock, or approximately $66.7 million.
The transaction is expected to close in mid-to-late fourth quarter of 2014. It remains subject to approval by LSB Financial’s shareholders and approval by federal regulatory authorities as well as the satisfaction of other customary closing conditions provided in the merger agreement. The merger agreement also provides that Lafayette Savings Bank will be merged into Old National Bank.