Two Chicago-area thrifts of similar size have laid out a merger plan that would create a $1.3 billion-asset company.
Hinsdale (Ill.) Financial Corp. and Liberty Bancorp, Chicago, last Friday disclosed their plan to create Alliance Bancorp.
The deal, which awaits regulatory and shareholder approvals, is to close early next year. Alliance's thrift subsidiary, Liberty Federal Bank, would be based in Hinsdale.
"The synergies were excellent," said Fredric G. Novy, Liberty's president and chief executive, who would become Alliance's chairman. "If we're looking to grow the company" without selling outright, "this is a natural."
The deal would be immediately accretive to earnings, executives said.
The consolidated company would emphasize consumer and multifamily residential lending, mortgage brokerage, and investment services, management said.
"These are two like-size, solid, stable thrift institutions," said Kenne P. Bristol, Hinsdale's president and chief executive, who would take the same titles at Alliance. "There's a common belief ... that there's still a need for true community banking."
William E. Jegen, a Hinsdale shareholder who has pressed management to increase shareholder value, said he was pleased at the news.
"I think it's exceptionally positive for the combined companies," he said, noting that Mr. Novy has a history of enhancing shareholder value.
He also praised the dividend plan for the new company. Alliance is slated to pay an annual cash dividend of 65 cents a share. Liberty's is 60 cents, and Hinsdale now pays no cash dividend.
The consolidation would generate about $2.5 million of cost savings after a year, Mr. Bristol said.
The companies' boards would combine to form Alliance's 14-member board. Management said layoffs are possible but would not estimate them.
The thrifts' markets don't overlap much. Hinsdale, with $684 million of assets, has branches in the far-western Chicago suburbs; $677 million-asset Liberty has offices in northwest Chicago and nearby suburbs.
Liberty shareholders are to get 1.054 share of Alliance Bancorp common stock for each of their shares. Hinsdale shareholders are to make a one- for-one exchange. That would give Liberty shareholders 49.3% of the new company as well as a share in any recovery from Hinsdale's supervisory goodwill lawsuits, the companies said.
