Nasdaq-listed Old Second Bancorp has agreed to acquire Bancorp Financial, the parent company of Evergreen Bank Group, in a cash-and-stock transaction valued at approximately $197m.
According to the terms of the definitive merger agreement, Bancorp Financial shareholders will receive 2.58 shares of Old Second common stock and $15.93 in cash per share, with around 75% of the consideration paid in stock and 25% in cash.
Based on Old Second’s closing share price of $18.08 on 24th February 2025, the transaction values Bancorp Financial stock at $62.6 per share.
Established in 2007, Bancorp Financial operates as the bank holding company for Evergreen Bank Group, which maintains three banking locations in DuPage and Cook counties in Illinois, US as well as one loan production office in Reno, Nevada.
Bancorp Financial had $1.45bn in assets as of 31st December 2024.
Bancorp Financial chairman Darin Campbell said: “By joining forces with Old Second, we are combining our strengths and shared values to create a better bank, offering enhanced services and opportunities for our employees, customers, key partnerships, and the communities we serve.
“Together, we are poised to make an even greater impact and continue our legacy of excellence in banking.”
Through the transaction, the combined entity will have about $7.1bn in assets, $6bn in deposits, and $5.2bn in loans. It is also expected to become the second-largest community bank in the Chicago market among banks with assets under $10bn.
The acquisition is expected to enhance Old Second’s strategic position, expanding its lending operations into new markets, particularly in powersports financing.
Moreover, the deal will leverage Old Second’s core deposit base, increasing its network to 56 branches across the Chicagoland area.
The merger is projected to deliver around 16% earnings per share accretion for Old Second stockholders in the first full year, once cost savings are fully realised.
Additionally, the pro forma company is expected to improve profitability, with an estimated 13 basis-point increase in return on assets and a 267 basis-point rise in return on tangible common equity.
Old Second Bancorp chairman, president, and CEO James Eccher said: “We are extremely pleased to announce the combination with Evergreen Bank.
“The partnership provides us with an exciting opportunity to continue to expand our presence in the greater Chicago markets as well as adding meaningful consumer lending capabilities that we have long lacked.”
The deal has been unanimously approved by the boards of both companies.
Subject to customary conditions, including regulatory approvals and the approval of Bancorp Financial shareholders, the deal is expected to be finalised in Q3 2025.
For the transaction, Piper Sandler served as a financial adviser to Old Second, with Nelson Mullins Riley & Scarborough providing legal counsel.
Bancorp Financial was advised by Keefe, Bruyette & Woods and received a fairness opinion from its board, with legal counsel provided by Vedder Price P.C.
