First Financial in Cincinnati has agreed to buy BankFinancial in Burr Ridge, Ill.
The $18.6 billion-asset First Financial said in a press release that it will pay $142 million in stock for the $1.4 billion-asset BankFinancial in a deal it nicknamed “Project Cockpit.” The deal, which is expected to close in the fourth quarter, priced BankFinancial at 91% of its tangible book value.
“We are excited to add consumer banking and lending solutions to the existing lineup of commercial services offered to Chicago businesses,” Archie Brown, First Financial’s president and CEO, said in the release. “The addition of BankFinancial’s retail financial centers enables us to continue our Midwest growth strategy and provides Chicago clients a broader range of banking and specialty solutions to help them meet their financial goals.”
The transaction is expected to be 2% accretive to First Financial’s earnings per share with “de minimis” dilution to the company’s tangible book value.
First Financial plans to cut about 45% of BankFinancial’s annual noninterest expenses. It expects to incur $25 million in merger-related expenses.
First Financial plans to unload BankFinancial’s $500 million multifamily portfolio after closing. It also plans to reposition all of BankFinancial’s securities holdings.
Morgan Stanley and Squire Patton Boggs advised First Financial. Keefe, Bruyette & Woods, Kirkland & Ellis, and Luse Gorman advised BankFinancial.