There are big changes ahead for a 111-year-old Chaska business institution.
Old National Bank plans to acquire Chaska-based KleinBank by the end of the year, according to plans announced June 21.
If approved by federal regulators, locations bearing the name of Minnesota’s largest family-owned state bank will be changed to Old National Bank, according to CEO Doug Hile.
Old National Bancorp (holding company of Old National Bank) would acquire KleinBank with stocks currently valued at $433.8 million, according to a press release issued by the two banks. Officials hope to close the deal by the end of the year.
President Matt Klein, who is the fourth generation of his family to work for the bank, said the decision was tough.
“We’re very positive about this and confident in the partner we have chosen and the positive impact it will have on everyone involved,” Klein said in an interview, noting Old National upholds KleinBank’s values. “They make extreme investments in communities where they are based,” he said.
The two companies have no plans of leaving KleinBank’s headquarters, at 1550 Audubon Road, Chaska, Klein said, adding that he will continue working at the company after the merger.
“I love what I do and what we’ve built and the customers we serve,” he said. “I’m absolutely committed to still working here.”
There is still a lot of work and decisions that have to be made, including staffing levels, Hile said.
“At the end of the day it’s a change and it’s a big change for our community here in Chaska. We’re very positive about how the future appears,” Hile said.
The history of KleinBank, and the Klein family, looms large in Chaska.
Once known as First National Bank, KleinBank is the longest-lasting business owned by one family in town, dating back to 1907. (Cooper’s Foods, also owned by one family, celebrated its 100th birthday last year.)
During the 1893 depression, George Klein, a German immigrant farmer, lent $3,800 to one of the local brickyards to keep it afloat.
George’s son C.H. Klein later acquired that brickyard and ran it with his brother C.P. Klein. Proceeds from that brickyard would allow the brothers to purchase controlling shares of stock in First National Bank of Chaska in 1907. A new building on Chestnut Street would follow later that year. In 1911, the Kleins built Victoria State Bank, and the bank continued to expand.
Today, KleinBank has 18 branches with more than 400 employees and assets of more than $2 billion, according to the release.
The merger comes as Old National recently merged with Anchor Bank in the Twin Cities and moves Old National to the fifth-largest market share position in the Twin Cities, according to a press release.
“We are humbled by the confidence of the Klein family in choosing Old National as their partner,” stated Old National Chair/CEO Bob Jones in a press release. “We look forward to continuing the legacy of exceptional client service and strong community engagement that has defined KleinBank for more than 110 years and four generations.”
Old National Bancorp has its headquarters in Indiana. The company also has locations in Kentucky, Michigan and Wisconsin.
“This transaction greatly strengthens and complements Old National’s recent expansion into the demographically attractive and economically vibrant Twin Cities market,” the release stated.