Banks play name game: Sky purchases Union Federal, then sells to Huntington:

Union Federal Bank became Sky Bank after Ohio-based Sky Financial Group in October completed its $322 million purchase of Indianapolis’ largest locally based financial institution.

But the Sky signs won’t be up for long.

On Dec. 20, Sky announced it was being acquired by another Ohio-based financial institution, Huntington Bancshares Inc., for $3.6 billion.

The deal will elevate Huntington to Indianapolis’ third-biggest bank. It had ranked eighth, based on employees. Locally, it has 20 locations and 270 employees. Sky has more than 40 local offices and about 500 employees.

Sky shed about 100 Union Federal employees after completing its acquisition.

More changes are coming as a result of the Sky-Huntington deal. Officials said some local branches likely will close and jobs will be eliminated, but specifics have not been determined.

Sky Regional President Mike Newbold, a veteran Indianapolis banker, will remain in that position for Huntington. A new role has not been determined for Huntington’s regional president, Cindy Keitch.

Sky bought Union Federal by purchasing its parent, Fort Wayne-based Waterfield Mortgage. Waterfield, privately held by a group of Hoosier investors, had sold off most of its other assets in early 2006, including its mortgage operations.

Waterfield officials began talking with Sky about an acquisition in 2005, as the company’s investors grew frustrated they couldn’t turn their ownership stakes into cash.

Soon after purchasing Union Federal, Sky officials announced they would end a naming rights deal for the Indianapolis Colts training complex on 56th Street. But they said Sky would remain one of the team’s biggest sponsors.