Old Second Bancorp, Inc. and Greater Chicago Financial Corp. jointly announced the signing of a definitive agreement and plan of merger (the “Agreement”) whereby Old Second Bancorp, Inc. will acquire Greater Chicago Financial Corp. and its wholly-owned bank subsidiary, ABC Bank, in an all cash transaction. Under the terms of the Agreement, Old Second Bancorp will acquire all of the outstanding common stock of Greater Chicago Financial Corp. in a transaction valued at approximately $41.1 million.
Sam Scott, Chairman of Greater Chicago Financial Corp., stated, “I am proud of the Bank our team has built and the positive impact we have had on the communities we serve. We believe this transaction offers benefits to our customers and the communities we serve, value for our shareholders and opportunities for our employees.
We are pleased to partner with Old Second, an organization with a demonstrated commitment to its communities. We want to assure ABC Bank customers, shareholders and employees that we will work to make the process as smooth as possible as we progress towards the closing of the transaction.”
“We are extremely pleased to announce the acquisition of Greater Chicago Financial Corp. and ABC Bank,” commented James Eccher, President and Chief Executive Officer of Old Second Bancorp. “ABC Bank’s four offices and more than a century of service in the Chicago market are a great complement to our existing footprint.
ABC Bank’s track record in meeting the credit needs of its communities is exemplary. This opportunity increases our presence in the city, allows us to leverage our existing capital and will provide customers of ABC Bank with an expanded menu of deposit, lending and financial management products.”
ABC Bank had total assets of $350.4 million as of September 30, 2017, including $246.3 million of total loans. The consideration represents approximately 119% of Greater Chicago Financial Corp.’s tangible book value as of September 30, 2017. Old Second Bancorp will acquire and simultaneously retire $6.3 million of outstanding subordinated debentures of Greater Chicago Financial Corp.
The ultimate per share consideration for shareholders of Greater Chicago Financial Corp. will depend upon the conversion election of holders of approximately $2.0 million of subordinated debentures that are convertible to common stock. The Agreement requires the purchase price to be increased by an amount equal to the aggregate amount of outstanding principal and accrued but unpaid interest of such converted indebtedness actually converted into Greater Chicago Financial Corp. common stock.
Under the terms of the Agreement, which has been unanimously approved by the boards of directors of both companies, Greater Chicago Financial Corp. will merge into Old Second Bancorp and ABC Bank will merge into Old Second Bancorp’s wholly-owned bank subsidiary, Old Second National Bank. Completion of the transaction is subject to certain closing conditions, including customary regulatory approvals and the approval of the shareholders of Greater Chicago Financial Corp.
The transaction is expected to close in the second quarter of 2018. Old Second Bancorp expects the acquisition to be immediately accretive to earnings per share, exclusive of transaction and integration related expenses, and to yield a tangible book value earn back of approximately two years.
Greater Chicago Financial Corp. was advised by the investment banking firm of D.A. Davidson & Co. and the law firm of Robbins Salomon & Patt, Ltd. Old Second Bancorp, Inc. was represented by the law firm of Nelson Mullins Riley & Scarborough LLP.
About Old Second Bancorp, Inc.
Old Second Bancorp, Inc., headquartered in Aurora, Illinois, is the bank holding company for Old Second National Bank, which operates 25 banking offices across seven counties in northern Illinois. At September 30, 2017, Old Second Bancorp had $2.36 billion in assets. Old Second Bancorp, Inc.’s common stock trades on The NASDAQ Stock Exchange under the symbol OSBC. More information about Old Second Bancorp is available by visiting the “Investor Relations” section of its website www.oldsecond.com
About Greater Chicago Financial Corp.
ABC Bank was incorporated in 1891 as Austin State Bank by the Castle Brothers. In 1987, Greater Chicago Financial Corp., a closely held nonpublic corporation, acquired Austin Bank of Chicago. After 25 years, Austin Bank of Chicago was rebranded to what is now known as ABC Bank.