Old Second Bancorp, Inc. and First Merchants Corporation Announce Transaction Involving Chicagoland Branch Operations
Old Second Bancorp (NASDAQ:OSBC) has agreed to purchase 5 Illinois branch locations from First Merchants (NASDAQ:FRME) in the Southeast Chicago MSA. The acquisition will add approximately $304 million in deposits and $12 million in branch-related loans to Old Second's portfolio. Old Second will pay a 7.5% deposit premium, estimated at $23 million in cash consideration.
This transaction enhances Old Second's position in the Chicagoland area, improving its scale and market penetration. For First Merchants, it marks a complete exit from suburban Chicago markets. The deal is expected to close near year-end 2024, subject to regulatory approval. Upon closing, the acquired branches will be rebranded as Old Second branches.
Old Second Bancorp (NASDAQ:OSBC) ha concordato di acquistare 5 filiali in Illinois da First Merchants (NASDAQ:FRME) nell'area metropolitana del sud-est di Chicago. L'acquisizione aggiungerà circa $304 milioni in depositi e $12 milioni in prestiti legati alle filiali al portafoglio di Old Second. Old Second pagherà un premio del 7,5% sui depositi, stimato in 23 milioni di dollari in considerazione in contante.
Questa transazione rafforza la posizione di Old Second nell'area di Chicagoland, migliorando la sua scala e penetrazione di mercato. Per First Merchants, segna un'uscita completa dai mercati suburbani di Chicago. L'accordo dovrebbe chiudersi verso la fine dell'anno 2024, soggetto ad approvazione normativa. Alla chiusura, le filiali acquisite saranno rinominate come filiali di Old Second.
Old Second Bancorp (NASDAQ:OSBC) ha acordado comprar 5 sucursales en Illinois de First Merchants (NASDAQ:FRME) en la MSA del sureste de Chicago. La adquisición añadirá aproximadamente $304 millones en depósitos y $12 millones en préstamos relacionados con las sucursales al portafolio de Old Second. Old Second pagará una prima del 7,5% sobre los depósitos, estimada en 23 millones de dólares en efectivo.
Esta transacción mejora la posición de Old Second en el área de Chicagoland, aumentando su escala y penetración de mercado. Para First Merchants, marca una salida completa de los mercados suburbanos de Chicago. Se espera que el acuerdo se cierre cerca de finales de 2024, sujeto a aprobación regulatoria. Al cierre, las sucursales adquiridas serán renombradas como sucursales de Old Second.
Old Second Bancorp (NASDAQ:OSBC)는 First Merchants (NASDAQ:FRME)로부터 시카고 남동부 MSA에 있는 5개의 일리노이 지점을 인수하기로 합의했습니다. 이번 인수로 Old Second의 포트폴리오에 약 $3억 4백만의 예금과 $1천2백만의 지점 관련 대출이 추가됩니다. Old Second는 7.5%의 예금 프리미엄을 지불하며, 현금으로 약 2천3백만 달러가 될 것으로 추정됩니다.
이번 거래는 Old Second의 시카고 랜드 지역 내 위치를 강화하여 규모와 시장 침투를 개선하는 데 기여합니다. First Merchants에게는 시카고 교외 시장에서 완전한 퇴출을 의미합니다. 거래는 2024년 말 경에 종료될 예정이며, 규제 승인이 필요합니다. 종료 시, 인수된 지점들은 Old Second 지점으로 브랜드가 변경됩니다.
Old Second Bancorp (NASDAQ:OSBC) a convenu d'acheter 5 succursales en Illinois auprès de First Merchants (NASDAQ:FRME) dans la région métropolitaine de Chicago au sud-est. L'acquisition ajoutera environ 304 millions de dollars de dépôts et 12 millions de dollars de prêts liés aux succursales au portefeuille d'Old Second. Old Second paiera une prime de 7,5 % sur les dépôts, estimée à 23 millions de dollars en espèces.
Cette transaction renforce la position d'Old Second dans la région de Chicagoland, améliorant son échelle et sa pénétration du marché. Pour First Merchants, cela marque une sortie complète des marchés suburbains de Chicago. La transaction devrait être conclue vers la fin de l'année 2024, sous réserve de l'approbation des autorités réglementaires. Une fois conclue, les succursales acquises seront rebaptisées succursales Old Second.
Old Second Bancorp (NASDAQ:OSBC) hat zugestimmt, 5 Filialen in Illinois von First Merchants (NASDAQ:FRME) im Südosten der Metropolregion Chicago zu kaufen. Die Übernahme wird voraussichtlich etwa 304 Millionen Dollar Einlagen und 12 Millionen Dollar filialspezifische Kredite zum Portfolio von Old Second hinzufügen. Old Second wird einen Einlagenaufschlag von 7,5% zahlen, der auf schätzungsweise 23 Millionen Dollar in bar geschätzt wird.
Diese Transaktion stärkt die Position von Old Second im Chicagoland-Gebiet und verbessert dessen Größe und Marktdurchdringung. Für First Merchants bedeutet dies einen vollständigen Rückzug aus den Vorstadtmärkten von Chicago. Der Abschluss des Deals wird gegen Ende des Jahres 2024 erwartet, vorbehaltlich der Genehmigung durch die Aufsichtsbehörden. Nach dem Abschluss werden die übernommenen Filialen als Old Second-Filialen umbenannt.
- Acquisition of 5 Illinois branches adds $304 million in deposits and $12 million in loans
- Enhances Old Second's position as one of the largest banks headquartered in Chicagoland
- Improves scale and market penetration in the Southeast Chicago market
- Expected to close by year-end 2024, pending regulatory approval
- Payment of 7.5% deposit premium, approximately $23 million in cash consideration
Insights
This acquisition marks a strategic move for Old Second Bancorp, significantly enhancing its market presence in the Chicagoland area. The 7.5% deposit premium, totaling approximately
This transaction reflects ongoing consolidation trends in the banking sector, particularly in mid-sized markets. Old Second's expansion in Southeast Chicago demonstrates a focus on building local market density, which can lead to operational efficiencies and improved competitiveness against larger national banks. The deal's structure, primarily centered on deposits, aligns with current industry trends where deposits are highly valued due to rising interest rates. For First Merchants, this divestiture streamlines its geographic footprint, potentially allowing for more focused operations in its core markets. This move could signal similar strategic realignments by other regional banks seeking to optimize their branch networks.
From a regulatory perspective, this transaction appears straightforward and likely to receive approval. The relatively small scale and the fact that it involves branch acquisitions rather than a full merger should simplify the regulatory process. However, both parties must ensure compliance with antitrust regulations, particularly regarding market concentration in the affected areas. The expected closing timeline of year-end 2024 seems realistic, allowing ample time for regulatory review and operational integration planning. Both banks have engaged reputable financial and legal advisors, which should help navigate any potential regulatory hurdles efficiently.
Old Second National Bank Acquires 5 Illinois Branches from First Merchants Bank
Proposed Acquisition to Add
CHICAGO, IL / ACCESSWIRE / August 27, 2024 / 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 the Chicagoland area, 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: |
SOURCE: Old Second Bancorp Inc.
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FAQ
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