Byline Bancorp in Chicago has agreed to acquire Inland Bancorp in Oak Brook, Illinois.
The $165 million cash-and-stock deal, expected to close in the second quarter of 2023, would expand the $7.3 billion-asset Byline's
The $1.2 billion-asset Inland Bancorp, parent of Inland Bank and Trust, has 10 branches, primarily in the western and northern suburbs of Chicago. It has $854 million of loans and $1 billion of deposits.
"Inland Bank and Trust is a well-established and trusted financial institution with deep client and community relationships, which we look forward to continuing,"
The deal price equates to 125% of Inland's tangible book value. S&P Global Market Intelligence valuations for bank targets in the Midwest over the past 12 months averaged 155% of tangible book.
The transaction comprises 86% stock and 14% cash.
The combined bank would have about $8.5 billion of assets, $6.2 billion of loans and $6.6 billion of deposits. It would have 47 branches across the greater Chicago metropolitan area, according to Byline.
"Inland brings to the table a high-quality deposit base and a complementary loan portfolio that should support growth going forward," said Damon DelMonte, an analyst at Keefe, Bruyette & Woods.
Byline estimated there would be cost reductions of about 30% of Inland's expense base. The deal is expected to be 8.1% accretive to Byline's earnings per share next year and 10.7% accretive in 2024.
The buyer expects to earn back tangible book value dilution in less than three years.
For Byline, Stephens served as financial advisor and Vedder Price as legal advisor. For Inland, Piper Sandler was financial advisor and Barack Ferrazzano Kirschbaum & Nagelberg was legal advisor.
