When Old National Bancorp announced plans to acquire Tower Bank, officials stressed that Tower customers would continue to see the same faces across the desk after the deal closes early next year.
That might have been the Evansville-based banks goal, but the September announcement has triggered a significant staff shake-up.
Five commercial lenders – from a staff of 12 – have resigned from Fort Wayne-based Tower. Their last official day was Thursday.
And Mike Cahill, Towers president and CEO, plans to leave in mid-May, after the banks computer systems are fully integrated. The acquisition is expected to close in mid-February.
Cahill said one reason he plans to leave is it wouldnt seem right to keep his job when a lot of Tower workers will lose theirs in the consolidation. Cahill declined to specify the number of jobs expected to be eliminated, saying its not his place to release the information.
But, he said, all Tower employees have been notified. Those losing jobs will be allowed to stay on until May 1, giving them time to find new positions, Cahill said.
Bob Jones, Old Nationals president and CEO, on Thursday said in an email that the final number hasnt been decided. From the beginning, however, Old National officials have acknowledged that some Tower jobs would be lost behind the scenes, where payments are processed.
Tower employed 165 at the time of the acquisition announcement. Bank officials prefer to describe the estimated $107.7 million deal as a partnership because each bank brings strengths to the table.
Old National has well-developed agriculture lending and insurance businesses, which open new revenue opportunities in the Fort Wayne market. Also, its larger asset base allows the bank to make bigger loans than Tower has been able to make.
In return, Tower offers a thriving health savings accounts business and local relationships.
Those local relationships are threatened, however, now that five commercial lenders have left. Cahill said only one of the five had signed a one-year nonsolicit agreement that forbids him to call on former business clients for the next 12 months. The other four have no such restriction.
The lenders are staying local, going to work for a competing bank thats not currently in the Fort Wayne market but plans to open here. Cahill declined to say which one but described it as a decent-sized bank. He expects a public announcement by that bank any time.
Jim Marcuccilli, STAR Banks president and CEO, said this kind of exodus often happens in the wake of an acquisition.
Banks that have been eying a market see an opportunity to ramp up quickly by raiding the disappearing banks lending team, he said. Bankers cultivate business by making contacts and building relationships.
Even so, Marcuccilli doubts Tower or, ultimately, Old National will lose existing loans as a result.
People dont just up and move accounts unless banks give them a good reason to, he said. I dont think people will just up and make a decision (to change banks) because people switch jobs.
Cahill expressed confidence that Towers loan portfolio will remain largely unaffected. Most business borrowers meet with numerous bank officials to address various financial needs, he said.
If you lose a client because you lose the relationship manager, you really didnt have a deep relationship with that client, he said.
The outgoing CEO put a positive spin on the news. The five departures create space for three Tower employees to continue in commercial lending. They were slated to be transferred to different positions as part of the restructuring, he said.
Cahill described the five loan officers departure as very cordial and said he met three of them for a drink the week before Christmas.
They saw this opportunity. They thought it was better for themselves, he said. Since change was coming, they chose the change they wanted.
The coming change, of course, was the move under the Old National umbrella.
Old National has been aggressively adding to its statewide presence, acquiring banks based in Bloomington, Columbus and Evansville, among other cities. Since 2007, the company has acquired 175 branches, not including Towers seven.
Cahill brushed aside any notion that the lenders defected from Tower.
I dont think its a blow to Tower Bank, he said. They never would have left if Tower Bank hadnt been sold.
As for Cahill, Towers CEO was offered the regional president position.
I dont know Fort Wayne, and Fort Wayne doesnt know me. But they know Mike Cahill, and they trust Mike Cahill, Jones said in September.
But, in the end, Cahill decided it just wasnt me.
Wendell Bontrager, Towers executive vice president and chief lending officer, will become Fort Wayne region president after the sale closes in February.
Cahill will transition to being the banks consultant, with a contract until mid-May.Cahill wasnt ready to go from being the boss to having three layers of management above him. The 53-year-old has been in executive leadership positions since he was 27.
And Ive kind of liked that, Cahill said.
The CEO is now updating his résumé.