An Indiana bank plans to expand southward with a deal to buy about $40 million of deposits from National City Bank of Indiana.

Lake City Bank, a subsidiary of $700 million-asset Lakeland Financial, said it would buy two branches in Peru and Greentown from National City Bank of Indiana, a subsidiary of $52 billion-asset, Cleveland-based National City Corp. The parties did not disclose the terms of the deal.

Lake City, which operates 33 branches throughout north-central Indiana, also announced recently that it is buying six branches from Cleveland-based KeyCorp and one with $25 million of deposits from First Chicago NBD Corp.

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