Old National Bancorp in Evansville, Ind., has agreed to pay for $79.1 million to buy 16 branches and other offices that it had been leasing.
The $15 billion-asset Old National will record an after-tax gain of about $8.3 million in connection with the purchases, according to a regulatory notice filed on Monday. The purchases, which are broken out into four separate transactions, are expected to close next month.
Old National said in the filing that it is purchasing the branches to provide greater control of the properties and to improve its overall efficiency. Old National also wants to get ahead of an expected upcoming change in accounting standards that will require companies to record the value of operating leases on their balance sheets; the change would undermine one of the selling points of sale-leaseback agreements, which is to take liabilities off the balance sheet.
The branches and offices are in Anderson, Evansville, Greenwood, Indianapolis, Jasper, Muncie, Newburgh, Richmond, Tell City, Terre Haute and Vincennes, Ind.; and in Owensboro, Ky.
It's the latest innovative move by Old National to restructure its own real estate holdings. In October 2015, Old National agreed to spend $66 million to repurchase 14 branches in Indiana and Kentucky that it had been leasing. In August the company agreed to buy its headquarters and two branches from a landlord for $91 million. And it plans to move its regional headquarters in Indianapolis to a prominent downtown building.