Old National Bancorp. of Evansville, Ind., plans to merge its 21 banks into one by yearend 1999.
The $5.9 billion-asset company operates under 20 brand names in Indiana, Illinois, and Kentucky. It has decided to operate under a single name, Old National Bank, and merge its bank charters and products to cut costs.
It said it expects to save about $400,000 a year for each bank it consolidates.
Ronald B. Lankford, Old National's president, said the plan reflects a shift in strategy. For years Old National allowed its banks to run somewhat autonomously, but it has recently moved toward a centralized approach.
Old National plans to consolidate three banks by Nov. 20 and would operate as a single bank by Nov. 5, 1999.
Mr. Lankford said the company also hopes to pare down its 72 checking account offerings to seven or fewer.
Brocker Vandervliet, an analyst with Keefe, Bruyette & Woods Inc., said the consolidation is "very positive." Still, Mr. Vandervliet said he is likely to lower his 1998 estimates for the company by a nickel, because he worries that its net interest margin will continue to decline.
As expected, Old National's second-quarter net income was affected by a $9.2 million loss in the consumer finance business, which is being discontinued. Apart from that business, the company said, earnings grew 9% from a year earlier, to $17.4 million.