Old National to expand southward with $344M acquisition of Nashville bank
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Old National Bancorp, the largest bank holding company headquartered in Indiana, announced Thursday that it has reached an agreement to acquire Nashville-based CapStar Financial Holdings Inc. in a $344 million deal that will greatly expand Old National’s presence in Tennessee.
Evansville-based Old National said the all-stock transaction has been approved by the board of directors at both companies and still requires approval from CapStar’s shareholders. The deal is expected to close in the second quarter of 2024.
Under terms of the agreement, each outstanding share of CapStar common stock will be converted into the right to receive 1.155 shares of Old National common stock, valuing the transaction at about $344.4 million, or $16.64 per share, based on Old National’s 30-day volume-weighted average closing stock price ending Oct. 25.
The acquisition includes 22 CapStar banking centers in 13 Tennessee counties, including seven branches in the Nashville area, and one banking center in Asheville, North Carolina. Old National said the branches will eventually be rebranded.
A spokesperson for Old National says the CapStar branches will be rebranded under the Old National umbrella, but a timeline for the integration is not yet known. CapStar has about 400 employees, though it’s uncertain whether any jobs will be negatively affected.
Old National began doing business in Tennessee last year by opening a wealth-management office in Nashville. It recently added a Nashville-based commercial banking and lending team.
CapStar, founded in 2008, had $3.3 billion in total assets, $2.3 billion in total loans and $2.8 billion in deposits as of Sept. 30.
“This partnership with CapStar–one of the most highly respected and successful community banks in Tennessee–is a tremendous cultural fit and a natural extension of our growth strategy,” Old National CEO Jim Ryan said in written comments. “By establishing a full-service banking presence in Nashville and several other strong Tennessee and North Carolina communities, we can more fully serve our existing Nashville-area clients while also introducing our client- and community-focused brand of banking to the surrounding region.”
Old National, which traces its roots to 1834, has $49 billion in assets and $28 billion in assets under management, making it one of the 30 largest banks in the United States. The company has more than 250 branches in seven Midwestern states, including 91 branches in Indiana and two dozen in the Indianapolis area.