First Midwest to merge with Indiana bank

First Midwest announced Tuesday it will merge with Old National Bancorp of Evansville, Indiana, to create a Midwestern bank with $45 billion in combined assets.

The combined bank will use the Old National name with headquarters in Chicago and Evansville. Old National's Jim Ryan will serve as CEO. First Midwest Chairman and CEO Mike Scudder will be the executive chairman.

The agreement is for an all-stock merger with a total market value of $6.5 billion. It will create the sixth-largest bank in the Midwest. First Midwest and Old National have almost no overlap in their service areas.

The combined bank will serve parts of Illinois, Indiana, Kentucky, Michigan, Wisconsin, Minnesota and Iowa with 274 total branches and more than 4,500 employees. It will have $34 billion in total deposits and $33 billion in assets under management.

The deal is expected to close in late 2021 or early 2022, pending regulatory and shareholder approvals.

"First Midwest and Old National are two relationship-focused financial institutions that have rich histories, extremely compatible cultures and a shared commitment to helping our clients achieve financial success," Scudder said in a news release. "As a combined organization, we will be in an even stronger position to invest, grow and innovate in talent, capabilities and services that will enhance an already superior client experience and further set us apart as a market leader not only in Chicago but across the Midwest."

The combined board of directors will be comprised of eight directors from each bank, with Becky Skillman of Old National remaining as lead independent director.

First Midwest acquired Southwest suburban Bridgeview Bank in 2019, one of five acquisitions since 2016.

"First Midwest's leadership team and colleagues not only mirror the Old National mission, values and culture, they also offer exceptional consumer and commercial banking services," Ryan said. "We are confident that the powerful synergies, additional market coverage and financial strength this partnership creates will drive long-term shareholder value, and we are excited about combining the outstanding legacies of two strong, client- and community-focused organizations."