Illinois-based Old Second Bancorp is expanding in its home market with the takeover of West Suburban Bancorp in a cash-stock deal worth around $297m.
The combined entity will have around $6.2bn in assets, $5.3bn in deposits and $3.4bn in loans.
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As per the agreed terms of the merger deal, West Suburban shareholders will be entitled to get 42.413 shares of Old Second common stock and $271.15 in cash for each held.
Total deal consideration includes nearly 65% stock and 35% cash.
The merger is said to create the largest community bank under $10bn in assets in Chicago.
Old Second Bancorp president and CEO James Eccher said: “Given our overlapping core principles and our complementary product and service offerings, we believe this merger creates the most compelling path forward for the shareholders of both institutions.
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By GlobalData“From our perspective, we do not believe there is another partner who could deliver us the same level of complementary geographic reach, scale on current products and services, upside and long-term shareholder value.”
The deal has already secured the nod of the two companies’ boards.
It now awaits clearance from shareholders and regulators, with completion anticipated in the final quarter of this year.
West Suburban Bancorp chairman Kevin Acker said: “We expect that the community bank culture and values that we share with Old Second, and the expanded products and capabilities that we will have following our merger will enhance our ability to provide exceptional banking services to all of our customers.”
Lombard, Illinois-based West Suburban is the parent of West Suburban Bank, which has 43 banking locations across the state. West Suburban had $2.97bn in assets at the end of June this year.
Old Second is the parent of Old Second National Bank, which has 29 banking offices across Illinois. The firm had $3.25bn in assets as of 30 June 2021.
Last month, First Midwest Bancorp, also based in Chicago, Illinois, and Indiana’s Old National Bancorp signed a $6.5bn merger deal.
