First Oak Brook Bancshares (NASDAQ:FOBB)
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MB Financial, Inc. (Nasdaq:MBFI) and First Oak Brook
Bancshares, Inc. (Nasdaq:FOBB) announced the signing of a definitive
merger agreement. Under the Agreement, MB Financial will acquire First
Oak Brook. First Oak Brook is a bank holding company headquartered in
Oak Brook, Illinois with $2.3 billion in assets, $1.9 billion in
deposits and 21 full-service branches in Chicago.
The merger will significantly increase MB Financial's presence in
the attractive Chicagoland banking market. Combined with First Oak
Brook, MB Financial will have over $8.2 billion in assets and 61
Chicago area locations.
"First Oak Brook's strong deposit gathering expertise combined
with MB Financial's proven asset origination capability will create a
company that has the potential to grow earning assets at double-digit
rates while funding them organically -- a truly powerful combination
in an industry where net interest income continues to be the main
earnings growth engine," stated Mitchell Feiger, President and Chief
Executive Officer of MB Financial.
"Our companies complement each other exceptionally well in terms
of talent, geographic coverage and business orientation," Mr. Feiger
continued. "We are truly excited about the opportunities for our
combined company."
"This merger means great things for First Oak Brook employees,
shareholders and customers," stated Richard M. Rieser, Jr., First Oak
Brook President and Chief Executive Officer. "Customers will have
access to a deep and broad array of banking services across a larger
geographic footprint. Since there is little overlap between our
footprints, our customers will continue to do business with the people
they know and trust. MB's commercial lending and leasing expertise and
earnings power will provide us with extra resources to continue to
expand our retail and community banking presence and meet the needs of
our commercial and public clients, particularly in our centers of
influence in the western suburbs and North Shore of Chicago."
The merger will also increase MB Financial's scale in a number of
business lines including treasury management, merchant processing,
asset management, trust, private banking, investment services and
leasing.
Mr. Feiger also noted, "Together, we will enhance our commercial
business in Chicago's middle market -- one of the most profitable
customer segments in banking. Our combined branches provide us with
strong market share in both DuPage and Cook Counties where almost 80%
of Chicago MSA middle-market businesses are located."
Based on MB Financial's average closing price for the five-day
period ended April 28th, the transaction is valued at $36.80 per First
Oak Brook share, for a transaction value of approximately $372
million, exclusive of stock options. At closing, First Oak Brook
shareholders will receive, in exchange for each share of First Oak
Brook common stock they hold, consideration with a value equal to the
sum of (1) 0.8304 multiplied by the average of the closing prices for
MB Financial common stock during the five trading days ending the day
before the completion of the merger and (2) $7.36, representing an
aggregate consideration mix of approximately 80% MB Financial stock
and 20% cash. Under the terms of the merger agreement, each holder of
First Oak Brook common stock will be entitled to elect to receive
their merger consideration in the form of MB Financial common stock,
cash or a combination of both, subject to limitations and prorations.
Receipt of shares of MB Financial stock in the merger is expected to
be tax-free.
The merger, is subject to regulatory approvals, approval by MB
Financial stockholders of the issuance of MB Financial shares in the
merger, and approval by First Oak Brook stockholders, and is expected
to close in the fourth quarter of 2006. The merger is expected to be
immediately accretive to MB Financial's annual GAAP and cash EPS.
Following the merger Mr. Rieser and Mr. Charles Gries from First
Oak Brook's board will join the MB Financial Board. Mr. Rieser will
continue in his current capacity until the transaction closes; at that
time, he will become Vice Chairman and Executive Vice President of MB
Financial, Inc.
The definitive agreement was unanimously approved by the boards of
MB Financial and First Oak Brook, and the directors have executed
agreements to vote their shares in favor of the transaction.
Goldman, Sachs & Co. is acting as financial advisor to MB
Financial and Silver, Freedman & Taff LLP is serving as its legal
counsel with respect to the transaction. First Oak Brook is being
advised by Keefe, Bruyette & Woods Inc. and Vedder, Price, Kaufman &
Kammholz, P.C. is acting as its legal counsel.
MB Financial, Inc. is the $5.9 billion Chicago-based holding
company for its lead bank, MB Financial Bank, N.A., and Union Bank,
N.A. (Oklahoma). MB Financial Bank also owns LaSalle Systems Leasing,
Inc. and Vision Investment Services, Inc., a registered broker/dealer.
MB Financial Bank (www.mbfinancial.com) is a leader among Chicago
area banks and has been delivering competitive personalized service
for more than 90 years to privately owned, middle-market companies as
well as to individuals who live and work in the communities where its
branches are located. MB Financial Bank currently has 40 branches
strategically located throughout the Chicago area.
First Oak Brook Bancshares, Inc. was organized in 1983 and has
been traded publicly since 1985. It is the 11th largest independent
bank holding company headquartered in Illinois and its primary
business is the ownership and control of Oak Brook Bank.
Oak Brook Bank is a $2.3 billion commercial bank chartered in
Illinois. Oak Brook Bank offers commercial and retail banking services
and trust and investment management. Seventeen of the bank's 21
Chicago branches are located in the western suburbs; three in the
northern suburbs; and one in downtown Chicago. First Oak Brook is
scheduled to open two additional branches later in the year.
Announcement of Conference Call
MB Financial and First Oak Brook will host a conference call at
10:30 a.m. C.S.T. on May 2, 2006. The number to call in the United
States is 1-800-573-4840 (Passcode: 92201939). If this time is
inconvenient, a digital recording will be available two hours after
the conference from May 2, 2006 to May 8, 2006 by dialing into
1-888-286-8010 in the United States (Passcode: 49326887). A copy of
the transaction investor presentation, along with a webcast of this
call will also be available at both www.mbfinancial.com and
www.firstoakbrook.com.
Forward-Looking Statements
When used in this press release and in filings with the Securities
and Exchange Commission, in other press releases or other public
shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases
"believe," "will likely result," "are expected to," "will continue,"
"is anticipated," "estimate," "project," "plans," or similar
expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date such
statements are made. These statements may relate to future financial
performance, strategic plans or objectives, revenues or earnings
projections, or other financial information. By their nature, these
statements are subject to numerous uncertainties that could cause
actual results to differ materially from those anticipated in the
statements. Statements about the expected timing, completion and
effects of the proposed merger and all other statements in this
release other than historical facts constitute forward-looking
statements.
Important factors that could cause actual results to differ
materially from the results anticipated or projected include, but are
not limited to, the following: (1) expected cost savings and synergies
from the MB Financial-First Oak Brook merger might not be realized
within the expected time frames and costs or difficulties relating to
integration matters might be greater than expected; (2) the requisite
stockholder and regulatory approvals for the MB Financial-First Oak
Brook merger might not be obtained; (3) the credit risks of lending
activities, including changes in the level and direction of loan
delinquencies and write-offs and changes in estimates of the adequacy
of the allowance for loan losses; (4) competitive pressures among
depository institutions; (5) interest rate movements and their impact
on customer behavior and net interest margin; (6) the impact of
repricing and competitors' pricing initiatives on loan and deposit
products; (7) the ability to adapt successfully to technological
changes to meet customers' needs and developments in the market place;
(8) MB Financial's ability to realize the residual values of its
direct finance, leveraged and operating leases; (9) the ability to
access cost-effective funding; (10) changes in financial markets; (11)
changes in economic conditions in general and in the Chicago
metropolitan area in particular; (12) the costs, effects and outcomes
of litigation; (13) new legislation or regulatory changes, including
but not limited to changes in federal and/or state tax laws or
interpretations thereof by taxing authorities; (14) changes in
accounting principles, policies or guidelines; (15) MB Financial's
deposit growth and deposit mix resulting from its new deposit
gathering strategy may be less favorable than expected; (16) the
impact of the guidance recently proposed by the federal banking
regulators regarding concentrations in real estate lending. and (17)
future acquisitions by MB Financial of other depository institutions
or lines of business.
MB Financial and First Oak Brook do not undertake any obligation
to update any forward-looking statement to reflect circumstances or
events that occur after the date on which the forward-looking
statement is made.
Additional Information
MB Financial will file a registration statement on Form S-4 with
the Securities and Exchange Commission (the "SEC") in connection with
the proposed transaction. The registration statement will include a
joint proxy statement of MB Financial and First Oak Brook that also
constitutes a prospectus of MB Financial, which will be sent to the
stockholders of MB Financial and First Oak Brook. Stockholders are
advised to read the joint proxy statement/prospectus when it becomes
available because it will contain important information about MB
Financial, First Oak Brook and the proposed transaction. When filed,
this document and other documents relating to the merger filed by MB
Financial and First Oak Brook can be obtained free of charge from the
SEC's website at www.sec.gov. These documents also can be obtained
free of charge by accessing MB Financial's website at
www.mbfinancial.com under the tab "Investor Relations" and then under
"SEC Filings" or by accessing First Oak Brook's website at
www.firstoakbrook.com under the tab "SEC Filings." Alternatively,
these documents, when available, can be obtained free of charge from
MB Financial upon written request to MB Financial, Inc., Secretary,
6111 North River Road, Rosemont, Illinois 60018 or by calling (847)
653-1992, or from First Oak Brook, upon written request to First Oak
Brook Bancshares, Inc., Rosemarie Bouman, 1400 Sixteenth Street, Oak
Brook, Illinois 60523 or by calling (630) 571-1050.
Participants in this Transaction
MB Financial, First Oak Brook and certain of their respective
directors and executive officers may be deemed to be participants in
the solicitation of proxies from stockholders in connection with the
proposed transaction under the rules of the SEC. Information about
these participants may be found in the definitive proxy statement of
MB Financial relating to its 2006 Annual Meeting of Shareholders filed
with the SEC by MB Financial on March 29, 2006 and the definitive
proxy statement of First Oak Brook relating to its 2006 Annual Meeting
of Shareholders filed with the SEC on April 7, 2006. These definitive
proxy statements can be obtained free of charge from the sources
indicated above. Additional information regarding the interests of
these participants will also be included in the joint proxy
statement/prospectus regarding the proposed transaction when it
becomes available.
This press release shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offer of securities shall be made
except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended.