Earlier this week, Byline Bancorp, Inc. and First Evanston Bancorp, Inc. jointly announced they had entered into a definitive agreement which provides for the acquisition by Byline of First Evanston in a cash and stock transaction valued at approximately $169 million. Upon completion of the transaction, the company will operate under the Byline Bank name and brand, Byline said.
The transaction will result in Chicago’s largest community bank with assets under $10 billion. The combined organization will have approximately $4.4 billion in assets, $3.1 billion in loans, and $3.5 billion in deposits, with 66 branches across the Chicago market, the companies said in a prepared statement.
First Evanston Bancorp, Inc., the parent company of First Bank & Trust, is headquartered in Evanston and had total assets of $1.1 billion, total loans of $892 million, and total deposits of $994 million as of Sept. 30. The bank has been in business more than 20 years and offers commercial, retail, mortgage banking, and wealth management services.
The bank’s main building is at 820 Church St., with a drive-through at 824 Emerson St., local branches at 520 Main St. and 2925Central St., and other branches in Skokie, Winnetka, Itasca, and Naperville.
“The acquisition of First Evanston is an exciting milestone for Byline,” said Alberto Paracchini, President and Chief Executive Officer of Byline. “We look forward to welcoming First Evanston’s customers and employees to the Byline family. First Evanston adds significant strength, both in terms of clients and talent, to our commercial banking business, allows us to expand our footprint into attractive Chicagoland markets and further solidifies our strong core deposit base. We remain focused on driving growth and profitability and we believe the acquisition of First Evanston will accelerate our trajectory toward being a high performing financial institution.”
Robert Yohanan, Chairman and Chief Executive Officer of First Evanston, said, “The combination of Byline and First Evanston will create one of the premier community banks serving the Chicago area. We believe our customers will be well served by being a part of a larger community bank offering greater convenience and a broader selection of products and services, while still providing the high level of customer service they have always enjoyed at First Evanston.”
Under the terms of the definitive agreement, at the closing of the transaction each share of First Evanston’s common stock will be converted into the right to receive 3.994 shares of Byline common stock and an amount in cash equal to $27.0 million divided by the number of outstanding shares of First Evanston common stock as of the closing date.
Byline currently estimates pre-tax expense reductions associated with the transaction will be approximately 29% of First Evanston’s expense base.
In an interview with the RoundTable, Mr. Yohanan said he and First Evanston co-founders Howard Kain and Jay Lytle have known Mr. Paracchini and some of his colleagues for several years. “Over the years they approached us to see if we could work together. Now that they are a public company, we felt like it was time to capitalize on our momentum. … We always said that if the right deal came along, we would take it to our shareholders. We’ve had a lot of banks approach us over the last 20 to 23 years, but the values and the markets didn’t fit. We felt, ‘If we’d go with them, we’d lose everything,’ [but] the deal with Byline is a perfect match.”
Mr. Yohanan said First Evanston feels the partnership will allow them to expand services. Conversely, First Evanston offers wealth management services, but Byline does not.
First Evanston will not, however, abandon its customer-centered service nor its commitment to the community, such as small-business loans, lines of credit, donations to local organizations, and sponsorships of local events, Mr. Yohanan said. “We expect to be strong in the community. Karen Hunt, Michael Corr, Randy Usen, and Simon Yohanan are all very involved in the community. Byline is 110% behind us; they recognize what we do,” he said.
Although Byline has indicated that there will be a 29% reduction in First Evanston’s expense base, Mr. Yohanan said none of the branches will close, and “our customers will see the same faces.” He will be on the board of Byline and be an adviser of First Evanston for a minimum of three years. “Jay and Howard are on retainer and we can still call upon them.”
As the three founders, Mr. Kain, Mr. Lytle, and Mr. Yohanan prepare their community bank for the expansion, Mr. Yohanan said creating and fledging First Bank & Trust “is the single most enjoyable thing I’ve ever done. The part that attracted me was customer service. Jay, Howard, and I took the risk to loan to social service agencies and small businesses. … To know that we have now put it in the hands of someone who shares our values is very, very gratifying.”
The transaction has been approved unanimously by each company’s Board of Directors and is expected to close during the first half of 2018. Closing of the transaction is subject to regulatory approvals, the approval of First Evanston’s and Byline’s shareholders, and satisfying certain other closing conditions.