Dive Brief:
- Cincinnati-based First Financial Bancorp has agreed to buy Burr Ridge, Illinois-based BankFinancial Corp. in an all-stock transaction valued at $142 million, the companies said Monday.
- The transaction, expected to close in the fourth quarter, would add 18 retail locations to First Financial’s Chicago area footprint.
- The deal comes roughly a month and a half after First Financial said it would buy Cleveland-area lender Westfield Bancorp for $325 million. The Westfield acquisition also is set to close in the fourth quarter.
Dive Insight:
The BankFinancial deal would add consumer banking to the commercial services the acquirer offers to Chicago-area businesses, Archie Brown, First Financial’s CEO, said Monday.
“The addition of BankFinancial's retail financial centers enables us to continue our Midwest growth strategy and provides Chicago clients a broader range of banking and specialty solutions to help them meet their financial goals,” Brown said in a prepared statement. “This partnership is truly complementary to our existing Chicago presence and provides capacity for incremental growth in the market.”
BankFinancial's consumer, trust and wealth management, and selected commercial credit lines will be incorporated into First Financial's business lines, while all BankFinancial bank employees will transition to become First Financial associates.
Morgan Gasior, BankFinancial's chair, said First Financial is “ideal” to continue the lender’s legacy.
“We look forward to being part of First Financial's continued success as we expand the scope of our financial services to our customers and communities,” Gasior said in a statement Monday.
Under the terms of the deal, each outstanding share of BankFinancial common stock will be converted to 0.48 of a share of First Financial common stock. The deal’s value was based on First Financial’s $23.69 closing price from Friday.
The BankFinancial acquisition is set to add $1.4 billion in assets, $1.2 billion in deposits and $800 million in loans to the Ohio lender. After the merger, all locations are expected to remain open, while the branches will be rebranded as First Financial, Raymond James analysts noted.
First Financial already counts $18.6 billion in total assets, $14.4 billion in deposits, $11.8 billion in loans and $2.6 billion in shareholders’ equity. The asset total does not consider the Westfield deal.
“While First Financial’s pending acquisition of Westfield Bancorp is also expected to close 4Q25, we do not expect regulatory issues with the dual pending deals, perhaps a sign of things to come for the industry,” Raymond James analysts wrote in their research notes Monday.
They also highlighted that the deal is expected to be received favorably by investors given “the easily digestible nature of the deal and modest price.”
“Though not a material boost to [earnings per share], the acquisition adds core funding capabilities to First Financial’s already-strong business, with BankFinancial’s existing branch presence and solid core deposit franchise complementing First Financial’s commercial lending capabilities in the Midwest,” Raymond James analysts wrote, adding that BankFinancial’s assets will be significantly repositioned with plans to restructure the multifamily loan portfolio (61% of loans) and securities book.
The deal is expected to be accretive to First Financial’s earnings per share, while First Financial’s tangible book value per share is estimated to remain approximately unchanged at closing, according to the press release.
