- $45 billion in total assets and $34 billion in total
deposits
- Unlocks immediate scale and positions for continued in-market
growth
- Accelerates opportunities to strengthen communities and drive
positive change
- Transaction expected to close in late 2021 or early 2022
Old National Bancorp (“Old National”) (NASDAQ: ONB) and First
Midwest Bancorp, Inc. (“First Midwest”) (NASDAQ: FMBI), jointly
announced today they have entered into a definitive merger
agreement to combine in an all-stock merger of equals transaction
with a total market value of $6.5 billion to create a premier
Midwestern bank with $45 billion in combined assets.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210601005603/en/
With nearly 270 combined years of service and a shared
commitment to Midwestern values, Old National and First Midwest are
two organizations driven by a customer-centric approach to banking,
an unwavering commitment to community and a strong focus on
corporate social responsibility, making the combined entity the
premier choice for employees, clients and shareholders.
Under the terms of the merger agreement, which has been
unanimously approved by the Boards of Directors of both companies,
First Midwest stockholders will receive 1.1336 shares of Old
National common stock for each share of First Midwest common stock
they own. Following completion of the transaction, former First
Midwest stockholders are expected to collectively represent
approximately 44% of the combined company. The new organization
will operate under the Old National Bancorp and Old National Bank
names, with dual headquarters in Evansville, Indiana and Chicago,
Illinois. Michael Scudder, Chairman and CEO of First Midwest
Bancorp, will serve as the Executive Chairman and Jim Ryan,
Chairman and CEO of Old National Bancorp, will maintain his role as
CEO.
Additional leadership positions for the combined entity
include:
- Mark Sander, President and Chief Operating Officer (First
Midwest)
- Jim Sandgren, CEO of Commercial Banking (Old National)
- Brendon Falconer, Chief Financial Officer (Old National)
- Kendra Vanzo, Chief Administrative Officer (Old National)
- Kevin Geoghegan, Chief Credit Officer (First Midwest)
- Thomas Prame, CEO of Community Banking (First Midwest)
- Chady AlAhmar, CEO of Wealth Management (Old National)
The complete executive leadership team is expected to be
announced prior to close.
The Board of Directors of the combined company will have 16
directors, consisting of 8 directors from Old National and 8
directors from First Midwest. Becky Skillman, lead independent
director for Old National, will retain this position in the
combined company.
“First Midwest and Old National are two relationship-focused
financial institutions that have rich histories, extremely
compatible cultures and a shared commitment to helping our clients
achieve financial success,” said Michael Scudder, Chairman and CEO
of First Midwest. “As a combined organization, we will be in an
even stronger position to invest, grow and innovate in talent,
capabilities and services that will enhance an already superior
client experience and further set us apart as a market leader not
only in Chicago but across the Midwest.”
“First Midwest’s leadership team and colleagues not only mirror
the Old National mission, values and culture, they also offer
exceptional consumer and commercial banking services,” said Old
National Chairman and CEO Jim Ryan. “We are confident that the
powerful synergies, additional market coverage and financial
strength this partnership creates will drive long-term shareholder
value, and we are excited about combining the outstanding legacies
of two strong, client- and community-focused organizations.”
Delivering Exceptional Value to Clients, Employees and
Communities
Strategic benefits of the merger include:
- Strengthened market position: The combined organization
will create the sixth largest bank headquartered in the Midwest,
with a presence in six of the largest Midwestern MSAs, strong
commercial banking capabilities, a robust retail footprint and a
significant wealth platform. The two banks have virtually no
service area overlap, limiting disruption.
- Top-tier commercial and community bank: With a larger
balance sheet, more diverse geographic footprint and deeper product
suite, the combined company will have increased capability to serve
both existing and new clients and compete with the largest banks in
the region.
- Digital and technology capabilities: The combined
organization creates the scale and profitability to accelerate
digital and technology capabilities to drive future investments in
consumer, wealth management and commercial banking services.
- Culture and employee focus: From First Midwest’s
multiple recognitions as a Best Place to Work to Old National’s
10-year run as one of the World’s Most Ethical companies, the
combined institution will remain committed to fostering a strong
culture of collaboration and trust, empowering its employees to
flourish.
- Community engagement: The merger enables the combined
entity to build on both organizations’ longstanding history of
service, enhance its ability to champion community initiatives and
drive positive change throughout its footprint.
Delivering Financially Compelling Benefits to
Shareholders
- Significant earnings per share accretion to both companies
in 2022: ~22% GAAP EPS accretion to Old National and ~35% GAAP
EPS accretion to First Midwest, assuming fully phased in cost
savings and excluding merger charges.
- Top quartile pro forma profitability: The combined
company is expected to generate an ROATCE of ~15% in 2022, assuming
fully phased in cost savings.
- Modest tangible book value per share earnback: ~3.2
years under the crossover method.
Timing
The transaction is expected to close in late 2021 or early 2022
subject to customary closing conditions, including regulatory and
shareholder approvals.
Transaction Advisors
Keefe, Bruyette & Woods, A Stifel Company, served as
exclusive financial advisor and Squire Patton Boggs (US) LLP acted
as legal advisor to Old National.
J.P. Morgan Securities LLC served as exclusive financial advisor
and Sullivan & Cromwell LLP acted as legal advisor to First
Midwest.
Joint Investor Call
Management of both Old National and First Midwest will hold a
conference call at 10:00 A.M. (CT) on Tuesday, June 1, 2021, to
discuss their partnership. The live audio web cast of the call,
along with the corresponding presentation slides, will be available
on Old National’s and First Midwest’s Investor Relations web pages
at oldnational.com and firstmidwest.com, respectively, as well as
the following url:
https://services.choruscall.com/links/onb210601.html. The webcast
will be archived there for 12 months. To listen to the live
conference call, dial (888)-237-0379 (U.S. Domestic) or
(929)-517-9523 (International), conference I.D. 1721307. A replay
of the call will also be available from 7:00 A.M. (CT) on June 2
through June 15. To access the replay, dial 855-859-2056,
conference I.D. 1721307.
About Old National
Old National Bancorp (NASDAQ: ONB), the holding company of Old
National Bank, is the largest bank holding company headquartered in
Indiana. With $23.7 billion in assets, it ranks among the top 100
banking companies in the U.S. and has been recognized as a World’s
Most Ethical Company by the Ethisphere Institute for 10 consecutive
years. Since its founding in Evansville in 1834, Old National Bank
has focused on community banking by building long-term, highly
valued partnerships and keeping our clients at the center of all we
do. This is an approach to business that we call The ONB Way.
Today, Old National’s footprint includes Indiana, Illinois,
Kentucky, Michigan, Minnesota and Wisconsin. In addition to
providing extensive services in retail and commercial banking, Old
National offers comprehensive wealth management, investment and
capital market services. For more information and financial data,
please visit Investor Relations at oldnational.com.
About First Midwest
First Midwest (NASDAQ: FMBI) is a relationship-focused financial
institution and one of the largest independent publicly traded bank
holding companies based on assets headquartered in Chicago and the
Midwest, with approximately $21 billion of assets and an additional
$14 billion of assets under management. First Midwest Bank and
First Midwest's other affiliates provide a full range of
commercial, treasury management, equipment leasing, consumer,
wealth management, trust and private banking products and services.
The primary footprint of First Midwest's branch network and other
locations is in metropolitan Chicago, southeast Wisconsin,
northwest Indiana, central and western Illinois, and eastern Iowa.
Visit First Midwest at firstmidwest.com.
Cautionary Note Regarding Forward-Looking Statements
This release includes “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, with
respect to First Midwest’s and Old National’s beliefs, goals,
intentions, and expectations regarding the proposed transaction,
revenues, earnings, loan production, asset quality, and capital
levels, among other matters; our estimates of future costs and
benefits of the actions we may take; our assessments of probable
losses on loans; our assessments of interest rate and other market
risks; our ability to achieve our financial and other strategic
goals; the expected timing of completion of the proposed
transaction; the expected cost savings, synergies and other
anticipated benefits from the proposed transaction; and other
statements that are not historical facts.
Forward‐looking statements are typically identified by such
words as “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project,” “should,” “will” and other
similar words and expressions, and are subject to numerous
assumptions, risks, and uncertainties, which change over time.
These forward-looking statements include, without limitation, those
relating to the terms, timing and closing of the proposed
transaction.
Additionally, forward‐looking statements speak only as of the
date they are made; First Midwest and Old National do not assume
any duty, and do not undertake, to update such forward‐looking
statements, whether written or oral, that may be made from time to
time, whether as a result of new information, future events, or
otherwise. Furthermore, because forward‐looking statements are
subject to assumptions and uncertainties, actual results or future
events could differ, possibly materially, from those indicated in
such forward-looking statements as a result of a variety of
factors, many of which are beyond the control of First Midwest and
Old National. Such statements are based upon the current beliefs
and expectations of the management of First Midwest and Old
National and are subject to significant risks and uncertainties
outside of the control of the parties. Caution should be exercised
against placing undue reliance on forward-looking statements. The
factors that could cause actual results to differ materially
include the following: the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the definitive merger agreement between
First Midwest and Old National; the outcome of any legal
proceedings that may be instituted against First Midwest or Old
National; the possibility that the proposed transaction will not
close when expected or at all because required regulatory,
shareholder or other approvals are not received or other conditions
to the closing are not satisfied on a timely basis or at all, or
are obtained subject to conditions that are not anticipated (and
the risk that required regulatory approvals may result in the
imposition of conditions that could adversely affect the combined
company or the expected benefits of the proposed transaction); the
ability of First Midwest and Old National to meet expectations
regarding the timing, completion and accounting and tax treatments
of the proposed transaction; the risk that any announcements
relating to the proposed transaction could have adverse effects on
the market price of the common stock of either or both parties to
the proposed transaction; the possibility that the anticipated
benefits of the proposed transaction will not be realized when
expected or at all, including as a result of the impact of, or
problems arising from, the integration of the two companies or as a
result of the strength of the economy and competitive factors in
the areas where First Midwest and Old National do business; certain
restrictions during the pendency of the proposed transaction that
may impact the parties’ ability to pursue certain business
opportunities or strategic transactions; the possibility that the
transaction may be more expensive to complete than anticipated,
including as a result of unexpected factors or events; diversion of
management’s attention from ongoing business operations and
opportunities; the possibility that the parties may be unable to
achieve expected synergies and operating efficiencies in the merger
within the expected timeframes or at all and to successfully
integrate First Midwest’s operations and those of Old National;
such integration may be more difficult, time consuming or costly
than expected; revenues following the proposed transaction may be
lower than expected; First Midwest’s and Old National’s success in
executing their respective business plans and strategies and
managing the risks involved in the foregoing; the dilution caused
by Old National’s issuance of additional shares of its capital
stock in connection with the proposed transaction; effects of the
announcement, pendency or completion of the proposed transaction on
the ability of First Midwest and Old National to retain customers
and retain and hire key personnel and maintain relationships with
their suppliers, and on their operating results and businesses
generally; and risks related to the potential impact of general
economic, political and market factors on the companies or the
proposed transaction and other factors that may affect future
results of First Midwest and Old National; uncertainty as to the
extent of the duration, scope, and impacts of the COVID-19 pandemic
on First Midwest, Old National and the proposed transaction; and
the other factors discussed in the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections of each of First Midwest’s and Old National’s
Annual Report on Form 10‐K for the year ended December 31, 2020, in
the “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of each of
First Midwest’s and Old National’s Quarterly Report on Form 10‐Q
for the quarter ended March 31, 2021, and in other reports First
Midwest and Old National file with the U.S. Securities and Exchange
Commission (the “SEC”).
Additional Information and Where to Find It
In connection with the proposed transaction, Old National will
file a registration statement on Form S‑4 with the SEC. The
registration statement will include a joint proxy statement of
First Midwest and Old National, which also constitutes a prospectus
of Old National, that will be sent to First Midwest’s and Old
National’s shareholders seeking certain approvals related to the
proposed transaction.
The information contained herein does not constitute an offer to
sell or a solicitation of an offer to buy any securities or a
solicitation of any vote or approval, 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. Investors and
security holders of First Midwest and Old National and their
respective affiliates are urged to read, when available, the
registration statement on form S-4, the joint proxy
statement/prospectus to be included within the registration
statement on Form S-4 and any other relevant documents filed or to
be filed with the SEC in connection with the proposed transaction,
as well as any amendments or supplements to those documents,
because they will contain important information about First
Midwest, Old National and the proposed transaction. Investors and
security holders will be able to obtain a free copy of the
registration statement, including the joint proxy
statement/prospectus, as well as other relevant documents filed
with the SEC containing information about First Midwest and Old
National, without charge, at the SEC’s website
(http://www.sec.gov). Copies of documents filed with the SEC by
First Midwest will be made available free of charge in the
“Investor Relations” section of First Midwest’s website,
https://firstmidwest.com/, under the heading “SEC Filings.” Copies
of documents filed with the SEC by Old National will be made
available free of charge in the “Investor Relations” section of Old
National’s website, https://www.oldnational.com/, under the heading
“Financial Information.”
Participants in Solicitation
First Midwest, Old National, and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies in respect of the proposed
transaction under the rules of the SEC. Information regarding First
Midwest’s directors and executive officers is available in its
definitive proxy statement, which was filed with the SEC on April
13, 2021, and certain other documents filed by First Midwest with
the SEC. Information regarding Old National’s directors and
executive officers is available in its definitive proxy statement,
which was filed with the SEC on March 8, 2021, and certain other
documents filed by Old National with the SEC. Other information
regarding the participants in the solicitation of proxies in
respect of the proposed transaction and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC. Free copies of these
documents, when available, may be obtained as described in the
preceding paragraph.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210601005603/en/
Old National Contacts: Media: Kathy Schoettlin (812)
465-7269 Investors: Lynell Walton (812) 464-1366
First Midwest Contacts: Media: Maurissa Kanter (708)
831-7345 Investors: Patrick Barrett (708) 831-7231
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