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Profits drop no growth barrier

Old National snags Grand Rapids bank


Old National Bancorp is continuing its acquisition spree even as it reports second-quarter profit that was one-third less than last year’s comparable period.

The Evansville-based holding company for Old National Bank on Monday posted earnings of $18.8 million, or 18 cents per diluted common share, a 34 percent decline from the $28.5 million, or 28 cents a share, reported for the same three months of 2013.

The company funneled $1.1 million in profits during the quarter into its fund to cover losses on bad loans, compared with a $3.3 million gain on collateral collected a year ago during the quarter ended June 30.

Old National completed its $110.3 million acquisition of Fort Wayne-based Tower Bancorp during the second quarter. Factors that reduced earnings during both second quarters included merger and integration expenses.

Bob Jones, Old National’s president and CEO, is focused on building the company.

“With nearly $140 million in new loan volume along with a continued strong loan pipeline and the culmination of our Tower Bank & Trust partnership, this was a quarter defined by growth,” Jones said in a statement.

“It’s worth noting that our current quarter earnings reflect more than $6 million in pre-tax merger and integration expenses,” he said. “Despite these anticipated costs, this was a quarter that saw Old National continue our growth strategy and build upon the positive momentum of previous quarters.”

Company officials Monday also announced a new acquisition deal.

Old National has reached an agreement to acquire Founders Financial Corp. for $38 cash and 3.25 shares of Old National common stock for each share of Founders stock. Based on Friday’s closing stock price, the deal is worth about $88.2 million.

Grand Rapids, Michigan-based Founders had $466 million in total assets as of June 30. Founded in 1991, Founders operates four full-service branches.

Old National’s total assets on the same date were $10.4 billion. As of June 30, it operated 173 branches.

The deal is expected to close before June 30, 2015, pending approval from Founders’ shareholders and banking regulators.