Old National Bancorp (ONB) in Evansville, Ind., will sell or close 27 branches as part of ongoing efforts to cut costs.

The company has already agreed to sell nine branches with roughly $174 million in deposits. The transactions exclude loans held at those branches.

Old National will sell five branches in western Kentucky to the $668 million-asset Planters Bank in Hopkinsville, Ky. The branches have $93.7 million in deposits that will change hands at a 2.53% deposit premium.

The $243 million-asset Legence Bank in Eldorado, Ill., will buy two Old National branches in southern Illinois with $46.3 million of deposits and at a deposit premium of 1.11%. Also, the $66 million-asset Area Bank in Rosiclare, Ill., will buy two other branches with about $33.5 million of deposits in southern Illinois for a 0.3% deposit premium.

Old National also said it will close 18 branches: nine around Indianapolis, five in central Indiana and four in southern Indiana.

Old National's expense base has long been a concern for investors and analysts. The company's management vowed to lower its efficiency ratio to 65% by the end of 2012. At June 30, its efficiency ratio was 69.2%, down from 70.88% in the first quarter.

Last year, the $8.7 billion-asset company closed more than two dozen branches as it integrated the failed Integra Bank. Old National's July 2011 acquisition of the $2.2 billion-asset Integra had been widely seen as a way for the company to lower expenses since the banks operated in the same markets.

Old National said that it had reviewed the market dynamics, deposits per branch, proximity to other branches and client traffic as part of its efforts to improve efficiency. Half of the closures are Indianapolis in-store branches with leases expiring soon; these locations will be consolidated into nearby branches.

The company expects no layoffs from the changes. Old National has 183 branches in Indiana, Kentucky and Illinois. The closures and sales are expected to happen late in the fourth quarter or early in the first quarter of 2013.

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