Byline Bancorp in Chicago has agreed to buy Illinois State Bancorp in Chicago.
The $9.9 billion-asset Byline said in a press release that it will pay $87.9 million in cash and stock for the $617.3 million-asset parent of First Nations Bank and Bank of Bourbonnais. The deal, which is expected to close in the first quarter, priced Illinois State at 107% of its tangible book value.
Illinois State has $470.5 million in loans and $510.5 million in deposits.
The acquisition “represents another meaningful step in Byline’s growth strategy and further strengthens our position in the Chicago market,” Roberto Herencia, Byline’s executive chairman and CEO, said in the release.
Illinois State “has developed deep customer relationships and a strong community banking franchise,” he added. “Together, we will be well-positioned to continue delivering the local decision-making, personalized service, and financial expertise our customers value while advancing our goal of becoming the preeminent commercial bank in Chicago.”
Byline forecast “mid-single-digit” accretion to its earnings per share. It should take less than two years to earn back an estimated 1.2% dilution to Byline’s tangible book value.
Byline, which projects “significant cost savings,” said it expects to incur $16.6 million of pretax merger-related expenses.
Vedder Price advised Byline. D.A. Davidson and Barack Ferrazzano Kirschbaum & Nagelberg advised Illinois State.