Evansville-based Old National Bancorp (Nasdaq: ONB) has acquired another Indiana bank. The deal for LSB Financial Corp. in Lafayette is valued at nearly $67 million. The move continues a major expansion period for Old National, which includes the acquisitions of Michigan-based United Bancorp Inc. and Tower Financial Corp. in Fort Wayne. Chief Executive Officer Bob Jones tells Inside INdiana Business he still believes there is room for growth in Indiana. June 4, 2014

News Release

EVANSVILLE & LAFAYETTE, Ind. – Evansville-based Old National Bancorp (NASDAQ: ONB) (“Old National”) and Lafayette-based LSB Financial Corp. (NASDAQ: LSBI) (“LSB”), jointly announced today the execution of a definitive agreement under which Old National will acquire LSB Financial through a stock and cash merger.

With $366 million in total assets and just over $312 million in deposits, LSB Financial is a savings and loan holding company with Lafayette Savings Bank as its wholly-owned subsidiary. The largest bank headquartered in Lafayette, Lafayette Savings Bank currently operates five full-service banking centers in Tippecanoe County, which is home to Purdue University and a successful high-tech manufacturing sector.

Founded in Evansville in 1834, with $9.5 billion in assets and 166 branches (as of March 31, 2014), Old National is the largest financial services holding company headquartered in Indiana and the fourth largest deposit holder in the Hoosier state. Currently Old National has two banking centers in Lafayette and one in West Lafayette and others throughout Indiana, as well as banking centers in Southern Illinois, Southwestern Michigan, Western Kentucky and Louisville.

“This partnership continues Old National's path of regional expansion by more than doubling our presence in the Lafayette market, and it also marks the union of two like-minded banks with outstanding legacies of client service and community engagement,” said Old National President & CEO Bob Jones. “By acquiring the community bank in Tippecanoe County, Old National is reinforcing our standing as the Indiana bank and one of the leading community focused banks in all of our markets.”

Randolph F. Williams, President and CEO of LSB Financial added, “Old National is an established, well-managed company that is truly Indiana's bank; they care about the people in the markets they serve. This partnership is in the best interests of our shareholders who will become part of a larger and growing institution. Our board believes that the best way to advance our long-standing commitment to the Lafayette community is to partner with a larger institution that has demonstrated commitment to our values, is respectful of our history, and has the ability to grow opportunities for our community, customers and employees. I'm looking forward to working with Bob and his team to establish this partnership.”

Under the terms of the merger agreement, which was unanimously approved by the boards of both companies, shareholders of LSB Financial will receive 2.269 shares of Old National common stock and $10.63 in cash (fixed) for each share of LSB Financial common stock. Based upon the June 3, 2014, closing price of $13.68 per share of Old National common stock, the transaction is valued at approximately $41.67 per share of LSB Financial common stock, or approximately $66.7 million. The transaction value is likely to change due to fluctuations in the price of Old National common stock. As provided in the merger agreement, the exchange ratio is subject to adjustment (calculated prior to closing) in the event shareholders' equity of LSB Financial is below a specified amount.

The transaction is expected to close in mid-to-late fourth quarter of 2014. It remains subject to approval by LSB Financial's shareholders and approval by federal regulatory authorities as well as the satisfaction of other customary closing conditions provided in the merger agreement. The merger agreement also provides that Lafayette Savings Bank will be merged into Old National Bank.

Old National was advised by Keefe, Bruyette and Woods and the law firm of Krieg DeVault LLP. LSB Financial was advised by Sandler O’Neill + Partners, L.P. and the law firm of Barnes & Thornburg LLP.

About Old National

Old National Bancorp (NASDAQ: ONB) is the largest financial services holding company headquartered in Indiana. With $9.5 billion in assets as of March 31, 2014, it ranks among the top 100 banking companies in the United States. Since its founding in Evansville, Ind., in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships with its clients. Today, Old National’s footprint includes Indiana, Western Kentucky and Louisville, Southern Illinois and Southwestern Michigan. In addition to providing extensive services in retail and commercial banking, wealth management, investments and brokerage, Old National owns Old National Insurance, one of the 100 largest brokers in the nation. For more information and financial data, please visit Investor Relations at oldnational.com.

About LSB Financial

LSB Financial Corp. (NASDAQ: LSBI) owns the largest bank headquartered in Lafayette, Indiana. Lafayette Savings Bank, FSB owns five banking centers in Tippecanoe County. It is a community-focused organization with a legacy of service that dates back to 1869. For more information, please visit Investor Relations at lsbank.com.

Source: Old National Bancorp

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