First Federal Savings Bank of Evansville, Ind., has agreed to buy two branches there from its hometown rival Old National Bancorp for an undisclosed sum.
The offices were formerly owned by Permanent Bank of Evansville, which was bought by Old National this year in a deal valued at $92 million. The Justice Department ordered $8.3 billion-asset Old National to sell the branches out of concern that it would otherwise control too much deposit market share in Evansville.
The branches hold deposits of $41 million. First Federal, which has $127 million of assets, expects to complete the deal by Dec. 1.
The deal would make First Federal Evansville's third-largest bank, after Old National and $2.5 billion-asset Integra Bank Corp. Harold Duncan, First Federal's chairman, chief executive officer, and president said he does not see First Federal as a competitor to the city's larger players.
"We will not go head-to-head because we know they can price us out of the business if they so desire," he said. "We think there is a place for a small, independent community bank under local management."
First Federal operates four branches in Evansville and is to open a fifth next month in nearby Newburgh, Ind.