MB Financial and First Oak Brook Bancshares to Merge
May 02 2006 - 2:23AM
Business Wire
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.
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