MAF Bancorp Inc.’s deal to buy the third-largest bank in Kane County, Ill., would instantly give it a much higher profile in Chicago’s fast-growing northwest suburbs.
MAF, of Clarendon Hills, Ill., announced the $177.5 million cash and stock deal for EFC Bancorp Inc. on Thursday.
MAF’s Mid America Bank subsidiary, which has two branches in Kane County, would gain seven more and go from No. 15 to No. 3 in deposit share in the county, according to Federal Deposit Insurance Corp. statistics.
“We’ve had this void in our map in the northwest suburbs. This really makes us a player in that market,” said Jerry A. Weberling, MAF’s chief financial officer, in an interview Friday.
Mid America would also move up one place, to No. 7, in deposit share for the entire metropolitan Chicago region.
MAF, which has assets of $9.7 billion, has been actively opening branches in its markets between Chicago and Milwaukee. Stephen L. Covington, an analyst with Stifel, Nicolaus & Co. Inc., of St. Louis, said that buying the $1 billion-asset EFC would put MAF’s growth in the northwest suburbs on a faster track.
“It would have been very difficult for them to de novo and get the scale they wanted in a relatively quick time,” Mr. Covington said.
EFC, of Elgin, is the parent of EFS Bank. Aside from the seven branches in Kane County, it has single branches in Cook and McHenry counties and several sites for branch expansion in those areas.
Allen H. Koranda, MAF’s chairman and chief executive, said in the announcement of the deal that those sites would position MAF for additional growth and that Kane County “has some of the best growth prospects in the Chicago region.” Its population is expected to increase by about 17% in the next five years.
EFC shareholders would receive about four-fifths of an MAF share for each of their EFC shares, $34.69 in cash for each share, or some combination of the two. Roughly 60% of the total price is to be paid in stock and 40% in cash, MAF said. The price is about two times EFC’s book, Mr. Weberling said.
Ronald J. Peterson, an analyst with Moors & Cabot Capital Markets in Chicago, said the deal makes strategic sense because the companies have similar loan portfolios and funding sources. Both are thrifts that primarily focus on residential real estate lending. At the end of the first quarter MAF had about 78% of its deposits in savings, money market, and time deposits, and EFC had 84%.
Mr. Peterson said that MAF’s shares might suffer a bit because investors may no longer view it as a seller.
“I think if there was any speculation that MAF was going to merge with anyone else, this may take that out of the stock price,” he said.
MAF’s stock was down 1.86% in late trading Thursday. EFC’s was up 14.5% on news of the deal, to $34. Their deal is expected to close in January.
