First Midwest to pay fine over flood insurance violations

First Midwest Bank has agreed to pay a $253,500 fine over flood insurance violations, the Federal Reserve said Thursday.

The Chicago-based bank did not admit to wrongdoing as part of its agreement with the Fed, but the settlement allows it to avoid formal proceedings and hearings on the issue. The National Flood Insurance Act calls for penalties of up to $2,000 for each violation.

Evansville, Indiana-based Old National Bancorp is in the process of acquiring First Midwest in a deal that is expected to close by March 1.

After an approval process that took longer than expected, the two companies announced last month the Fed had blessed the merger. The banks were initially aiming to close the deal, which will create a $45 billion-asset bank with a footprint across much of the Midwest, by the end of 2021.

First Midwest’s branches will eventually carry the Old National name, but they will continue to operate under their current brand until the banks convert their systems, a process that’s expected to wrap up in July.