MB Financial to Buy American Chartered in Chicago for $449M

MB Financial in Chicago has agreed to buy American Chartered Bancorp in Chicago.

The $15 billion-asset MB Financial said in a press release Sunday that it will pay $449 million, or $9.30 a share, in cash and stock for the $2.8 billion-asset American Chartered. The merger, which values American Chartered at 219% of its tangible book value, is expected to close in mid-2016. 

American Chartered, which serves middle-market and emerging middle-market businesses, has 15 branches, $2.2 billion in deposits and $2 billion in loans.

MB Financial disclosed in a regulatory filing that it expects the deal to be 5% accretive to its earnings per share in the first year and 7% accretive in subsequent years, excluding $32 million in pretax merger-related costs. The company plans to cut about 29% of American Chartered's core operating expenses.

The acquisition "is consistent with our mission of building Chicagoland's premier commercial bank," Mitchell Feiger, MB Financial's president and chief executive, said in the release. "American Chartered brings a strong middle-market commercial banking lending team and client base, an unparalleled core deposit franchise and a proven track record of profitable organic growth."

The deal is expected to be immediately accretive to MB Financial's annual earnings per share, excluding merger-related costs.

Sandler O'Neill and Silver, Freedman, Taff & Tiernan advised MB Financial. Evercore, Austin Associates and Wachtell, Lipton, Rosen & Katz advised American Chartered.