Old Second Bancorp, Inc. and First Merchants Corporation Announce Transaction Involving Chicagoland Branch Operations
Old Second Bancorp (NASDAQ: OSBC) and First Merchants (NASDAQ: FRME) have announced a transaction involving Chicagoland branch operations. Old Second National Bank will acquire 5 Illinois branches from First Merchants Bank in the Southeast Chicago MSA, adding $304 million in deposits and $12 million in loans. Old Second will pay a 7.5% deposit premium, equating to approximately $23 million in cash consideration.
This acquisition strengthens Old Second's position as one of the largest Chicago-headquartered banks and expands its branch network in the Southeast Chicago market. For First Merchants, this sale completes its exit from suburban Chicago markets. The transaction is expected to close near year-end 2024, subject to regulatory approval.
Old Second Bancorp (NASDAQ: OSBC) e First Merchants (NASDAQ: FRME) hanno annunciato una transazione riguardante le operazioni delle filiali di Chicagoland. Old Second National Bank acquisterà 5 filiali in Illinois da First Merchants Bank nell’MSA del Sud-Est di Chicago, aggiungendo $304 milioni in depositi e $12 milioni in prestiti. Old Second pagherà un premio del 7,5% sui depositi, equivalente a circa $23 milioni in contante.
Questa acquisizione rafforza la posizione di Old Second come una delle bancarie con sede a Chicago più grandi e espande la sua rete di filiali nel mercato del Sud-Est di Chicago. Per First Merchants, questa vendita completa il suo uscita dai mercati suburbani di Chicago. Si prevede che la transazione si chiuda verso la fine dell’anno 2024, soggetta ad approvazione regolatoria.
Old Second Bancorp (NASDAQ: OSBC) y First Merchants (NASDAQ: FRME) han anunciado una transacción que involucra las operaciones de sucursales en Chicagoland. Old Second National Bank adquirirá 5 sucursales en Illinois de First Merchants Bank en el MSA del Sureste de Chicago, añadiendo $304 millones en depósitos y $12 millones en préstamos. Old Second pagará una prima del 7.5% sobre los depósitos, lo que equivale a aproximadamente $23 millones en efectivo.
Esta adquisición fortalece la posición de Old Second como uno de los bancos más grandes con sede en Chicago y expande su red de sucursales en el mercado del Sureste de Chicago. Para First Merchants, esta venta completa su salida de los mercados suburbanos de Chicago. Se espera que la transacción se cierre cerca de finales de 2024, sujeta a la aprobación regulatoria.
Old Second Bancorp (NASDAQ: OSBC)와 First Merchants (NASDAQ: FRME)는 시카고랜드 지점 운영과 관련된 거래를 발표했습니다. Old Second National Bank는 First Merchants Bank로부터 일리노이주에서 5개 지점을 인수할 예정이며, 이는 3억 4천만 달러의 예금과 1200만 달러의 대출을 추가하는 것입니다. Old Second는 예금 프리미엄 7.5%를 지급하며, 이는 약 2300만 달러의 현금에 해당합니다.
이번 인수는 Old Second의 시카고 본사 은행 중 가장 큰 은행 중 하나로서의 위치를 강화하고, 시카고 남동부 시장에서의 지점 네트워크를 확장하는 데 기여합니다. First Merchants의 경우 이 판매는 시카고 교외 시장에서의 퇴출을 완성하는 것입니다. 거래는 2024년 연말 근처에 종료될 것으로 예상되며, 규제 승인을 받아야 합니다.
Old Second Bancorp (NASDAQ: OSBC) et First Merchants (NASDAQ: FRME) ont annoncé une transaction concernant les opérations des succursales de Chicagoland. Old Second National Bank va acquérir 5 succursales dans l'Illinois auprès de First Merchants Bank dans la MSA de Chicago Sud-Est, ajoutant 304 millions de dollars en dépôts et 12 millions de dollars en prêts. Old Second paiera une prime de 7,5 % sur les dépôts, ce qui représente environ 23 millions de dollars en espèces.
Cette acquisition renforce la position d'Old Second en tant que l'une des plus grandes banques de Chicago et élargit son réseau de succursales sur le marché du Sud-Est de Chicago. Pour First Merchants, cette vente complète sa sortie des marchés suburbains de Chicago. La conclusion de la transaction est attendue aux alentours de la fin de l'année 2024, sous réserve de l'approbation réglementaire.
Old Second Bancorp (NASDAQ: OSBC) und First Merchants (NASDAQ: FRME) haben eine Transaktion bekannt gegeben, die die Filialbetriebe in Chicagoland betrifft. Die Old Second National Bank wird 5 Filialen in Illinois von der First Merchants Bank in der MSA Südost-Chicago übernehmen und 304 Millionen Dollar an Einlagen sowie 12 Millionen Dollar an Krediten hinzufügen. Old Second wird eine Einlagenprämie von 7,5% zahlen, was etwa 23 Millionen Dollar in bar entspricht.
Diese Übernahme stärkt die Position von Old Second als eines der größten Banken mit Sitz in Chicago und erweitert ihr Filialnetz im Markt für Südost-Chicago. Für First Merchants schließt dieser Verkauf den Ausstieg aus den Vorstadtmärkten von Chicago ab. Es wird erwartet, dass die Transaktion gegen Ende 2024 abgeschlossen wird, vorbehaltlich der Genehmigung durch die Aufsichtsbehörden.
- Acquisition of 5 Illinois branches enhances Old Second's market position in Chicago
- Addition of $304 million in deposits strengthens Old Second's funding base
- Expansion of branch network improves scale and market penetration for Old Second
- First Merchants completes strategic exit from suburban Chicago markets
- First Merchants divests $304 million in deposits and $12 million in loans
- Old Second pays a 7.5% deposit premium, approximately $23 million in cash
Insights
This acquisition by Old Second Bancorp is a strategic move to expand its market presence in the Southeast Chicago MSA. With the addition of
The transaction's impact on Old Second's financials will be notable, potentially boosting its deposit base and lending capacity. However, investors should watch for integration costs and any potential short-term pressure on earnings. For First Merchants, this divestiture aligns with its strategy to exit the suburban Chicago market, which could lead to improved operational efficiency and resource allocation.
This branch acquisition reflects the ongoing consolidation trend in the banking sector, particularly in competitive metropolitan areas. Old Second's move to enhance its Chicago footprint demonstrates a focus on local market dominance, which could yield benefits in terms of customer acquisition and retention. The transaction's timing, expected to close by year-end 2024, allows for adequate preparation and minimal disruption to customers.
From a market perspective, this deal underscores the importance of scale in banking operations. Smaller regional banks are increasingly looking to expand their presence in key markets to compete effectively with larger national institutions. This trend is likely to continue, potentially leading to further consolidation in the banking sector, especially in densely populated urban areas.
The transaction's structure as a Purchase and Assumption Agreement is a common approach in branch acquisitions, allowing for a selective transfer of assets and liabilities. This method typically streamlines the regulatory approval process compared to a full bank merger. However, the deal still requires regulatory approval, which introduces a degree of uncertainty and potential delays.
Investors should note that while the closing is anticipated by year-end 2024, regulatory scrutiny could extend this timeline. The involvement of reputable financial and legal advisors on both sides suggests a well-structured deal, potentially mitigating legal and compliance risks. The immediate rebranding of acquired branches upon closing indicates confidence in a smooth transition but also necessitates careful planning to ensure regulatory compliance and customer communication.
Old Second National Bank Acquires 5 Illinois Branches from First Merchants Bank
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Proposed Acquisition to Add
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CHICAGO, Aug. 27, 2024 (GLOBE NEWSWIRE) -- Old Second Bancorp, Inc. (“Old Second Bancorp”) (NASDAQ: OSBC), the parent company of Old Second National Bank (“Old Second”), and First Merchants Corporation (“First Merchants Corp.”) (NASDAQ: FRME), the parent company of First Merchants Bank (“First Merchants”), jointly announced today that Old Second and First Merchants have entered into a Purchase and Assumption Agreement where Old Second will purchase 5 Illinois branch locations in the Southeast Chicago MSA as well as certain branch related loans and deposits from First Merchants.
The acquisition enhances Old Second’s position as one of the largest banks headquartered in Chicago and adds meaningfully to its existing branch network and in the Southeast Chicago market, allowing for improved scale and penetration. The sale by First Merchants completes its branch exit from suburban Chicago markets.
Old Second anticipates assuming approximately
Keefe, Bruyette & Woods, Inc. served as financial advisor, and Nelson Mullins Riley & Scarborough LLP served as legal advisor to Old Second Bancorp. Stephens Inc. served as financial advisor, and Dentons Bingham Greenebaum LLP served as legal advisor to First Merchants Corp.
ABOUT OLD SECOND BANCORP
Old Second Bancorp, Inc., headquartered in Aurora, Illinois, is the bank holding company for Old Second National Bank, which celebrated 150 years of operation in 2021. Old Second's common stock trades on The NASDAQ Stock Market under the symbol "OSBC". More information about Old Second is available by visiting the "Investor Relations" section of its website www.oldsecond.com.
Old Second National Bank, Member FDIC, provides full service banking which includes customary consumer and commercial products and services that banks provide including demand, NOW, money market, savings, time deposit, individual retirement and Health Savings Accounts; commercial, industrial, consumer and real estate lending, including installment loans, agricultural loans, lines of credit and overdraft checking; safe deposit operations; trust services; wealth management services, and an extensive variety of additional services tailored to the needs of individual customers. The Bank also offers a full complement of electronic banking services including web and mobile banking and corporate cash management. As of June 30, 2024, Old Second has approximately
ABOUT FIRST MERCHANTS CORPORATION
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).
First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol “FRME.” Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).
FORWARD-LOOKING STATEMENTS
This press release and statements by our management may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our expectations with respect to the proposed transaction. Forward-looking statements are based on our current beliefs, expectations and assumptions and on information currently available and, can be identified by the use of words such as “expects,” “intends,” “believes,” “may,” “will,” “would,” “could,” “should,” “plan,” “anticipate,” “estimate,” “possible,” “likely” or the negative thereof as well as other similar words and expressions of the future. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others: (i) the possibility that any of the anticipated benefits of the proposed transaction will not be realized or will not be realized within the expected time period; (ii) the risk that integration of the operations of the branch locations with Old Second will be materially delayed or will be more costly or difficult than expected; (iii) the effect of the announcement of the transaction on employee relationships, customer relationships and operating results; and (iv) the satisfaction of closing conditions, including, but not limited to, the receipt of requisite regulatory approvals. For a discussion of additional factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in Old Second Bancorp’s Form 10-K for the year ended December 31, 2023, its Forms 10-Q for the quarters ended March 31, 2024 and June 30, 2024, and other reports that are filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made and, except as required by law, Old Second Bancorp does not assume any duty to update forward-looking statements.
| OLD SECOND NATIONAL BANK CONTACT: | FIRST MERCHANTS BANK CONTACT: |
| Bradley S. Adams | Nicole M. Weaver |
| Executive Vice President, Chief Operating Officer and | First Vice President and |
| Chief Financial Officer | Director of Corporate Administration |
| (630) 906-5484 | (765) 521-7619 |
| BAdams@oldsecond.com | nweaver@firstmerchants.com |
| www.oldsecond.com | www.firstmerchants.com |
FAQ
How many branches is Old Second National Bank acquiring from First Merchants Bank?
What is the value of deposits and loans involved in the Old Second and First Merchants (FRME) transaction?
What is the deposit premium Old Second is paying in the acquisition from First Merchants (FRME)?
When is the expected closing date for the Old Second and First Merchants (FRME) branch acquisition?
