Old Second Bancorp Inc. in Aurora, Ill., announced Tuesday that it has agreed to acquire HeritageBanc Inc. in Frankfort, Ill., for $86 million in cash and stock.
The $350 million-asset Heritage is the parent of Heritage Bank. Old Second, a three-bank holding company with $2.6 billion of assets, intends to merge Heritage Bank into its Old Second National Bank.
Under the deal, valued at 3.3% times the seller's tangible book value, Old Second would gain five branches in some of the Chicago area's fastest-growing sections, including Frankfort and New Lenox.
"This will fill out our horseshoe location around Chicago," William B. Skoglund, Old Second's chairman, president, and chief executive, said in a conference call. "We like to say the growth in Chicago is occurring in areas with open land."
John Ladowicz, Heritage's chairman and CEO would join Old Second's board, and Patrick Roe, its president and chief operating officer, would join Old Second's management team.
Mr. Skoglund said he is confident that other key Heritage personnel would join Old Second. The deal is expected to close in the first or second quarter.
