Continuing its expansion efforts in Chicago, MAF Bancorp Inc. is acquiring Chesterfield Financial Corp., a $361 million-asset thrift headquartered on the city’s South Side, for $128.5 million in cash and stock.
The deal, announced Friday and expected to close in the fourth quarter, would be the $9.1 billion-asset MAF’s third acquisition in Chicago in three years. It acquired the $322 million-asset Mid Town Bancorp in November 2001 and the $723 million-asset Fidelity Bancorp in July 2003.
Daniel E. Cardenas, an analyst with Howe Barnes Investments Inc. in Chicago, said he does not think MAF, of Clarendon Hills, Ill., is done buying.
“Chicago is the crown jewel of midwestern markets,” he said. “There are still lots of opportunities, so I wouldn’t be surprised if MAF continued to build its market share” by acquisition.
MAF’s strategy is similar to that of a number of other companies. Fifth Third Bancorp of Cincinnati, Washington Mutual Inc. of Seattle, and National City Corp. of Cleveland are all busy bulking up in the Windy City.
And with its sizable Chicago operations, MAF is also seen as an acquisition target. Its Mid America Bank had a 2% share of the Chicago area’s $211.4 billion deposit market as of June 30, 2003, according to the Federal Deposit Insurance Corp.
“I’m sure there are a lot of banks that want to buy this company,” Mr. Cardenas said. “It’s got a decent market share in Chicago as well as a nice toehold in Milwaukee.”
MAF entered the Milwaukee market in December, when it acquired the $2.3 billion-asset St. Francis Capital Corp. of Brookfield, Wis., for $263.6 million.
Chesterfield Financial is the holding company for the 80-year-old Chesterfield Savings and Loan Association of Chicago. In addition to its South Side branch, it has branches in two Chicago suburbs, Palos Hills and Frankfurt.
“We’re excited about the potential this gives us to market our retail loan and deposit products and business banking services,” MAF’s chairman and chief executive officer, Alan H. Koranda, said in a press release Saturday.
Three years after a May 2001 initial public offering, Chesterfield still has not invested all the money it raised. As of March 30, its shareholders’ equity was $74.8 million, giving it a Tier 1 capital ratio of 17.7%.
The opportunity to redeploy Chesterfield’s excess capital was one of the factors that prompted MAF to pursue a deal.
The $128.5 million offer works out to $31.50 a share, or 1.63 times Chesterfield’s book value.
In midday trading Monday, MAF’s stock was down 0.65%, to $43.03 a share. Chesterfield shares were up 9.2%, to $31.01.
