Old Second National Bank acquires 5 branches in Illinois from First Merchants Bank
Planned acquisition expected to add $304 million in deposits and $12 million in loans
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”), today jointly announced that Old Second and First Merchants have entered into a purchase and acquisition agreement under which Old Second will acquire five Illinois branches in the southeast Chicago MSA and certain loans and deposits associated with the branches from First Merchants.
The acquisition strengthens Old Second’s position as one of the largest banks headquartered in the Chicago metropolitan area and significantly expands the existing branch network and market in Southeast Chicago, resulting in greater scale and penetration. With the sale, First Merchants completes its branch exit from Chicago’s suburban markets.
Old Second expects to assume approximately $304 million in deposits and acquire approximately $12 million in branch-related loans. Old Second will pay a deposit premium of 7.5%, or approximately $23 million, in estimated cash consideration to First Merchants. The branches to be acquired by Old Second will operate as First Merchants branches until closing and will be rebranded as Old Second branches immediately following closing of the transaction. Subject to regulatory approval, closing is expected to occur in late 2024.
Keefe, Bruyette & Woods, Inc. acted as financial advisor and Nelson Mullins Riley & Scarborough LLP acted as legal advisor to Old Second Bancorp. Stephens Inc. acted as financial advisor and Dentons Bingham Greenebaum LLP acted as legal advisor to First Merchants Corp.
ABOUT OLD SECOND BANCORP
Old Second Bancorp, Inc., based in Aurora, Illinois, is the bank holding company for Old Second National Bank, which celebrated its 150th anniversary in 2021. Old Second’s common stock trades on the NASDAQ stock exchange under the symbol “OSBC.” For more information about Old Second, visit the Investor Relations section of the website at www.oldsecond.com.
Old Second National Bank, Member FDIC, offers full-service banking that includes the usual consumer and business products and services that banks offer, including demand deposits, NOW, money market, savings, time deposits, individual retirement and health savings accounts; commercial, industrial, consumer and real estate loans, including installment loans, agricultural loans, lines of credit and overdrafts; safe deposit box services; trust services; wealth management services, and an extensive range of additional services tailored to the needs of individual customers. The bank also offers a full range of electronic banking services, including web and mobile banking and corporate cash management. As of June 30, 2024, Old Second has approximately $5.7 billion in assets, $4.5 billion in deposits, and $4.0 billion in loans.
ABOUT FIRST MERCHANTS CORPORATION
First Merchants Corporation is a financial holding company based in Muncie, Indiana. The company has a full-service banking charter, First Merchants Bank. The bank also does business as First Merchants Private Wealth Advisors (a division of First Merchants Bank).
First Merchants Corporation’s common stock trades on the NASDAQ Global Select Market System under the symbol “FRME.” Quotes are published in daily newspapers and can be found on the Company’s website (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 as well as information currently available to us and can be identified by the use of words such as “expects,” “intends,” “believes,” “may,” “will,” “would,” “could,” “should,” “plans,” “anticipates,” “estimates,” “possible,” “likely” or the negative thereof and 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 differ materially 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 the integration of the operations of the stores with Old Second will be significantly delayed or will be more expensive or difficult than expected; (iii) the impact of the announcement of the transaction on employee relations, customer relationships and operating results; and (iv) the satisfaction of closing conditions, including, but not limited to, the receipt of required regulatory approvals. For a discussion of other factors that could cause actual results to differ materially from those described in the forward-looking statements, see the risk factors discussed in Old Second Bancorp’s Form 10-K for the year ended December 31, 2023, Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, and other reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and Old Second Bancorp undertakes no obligation to update forward-looking statements, except as required by law.
SOURCE: Old Second Bancorp Inc.
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