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  • Old National and First Midwest Announce Merger to Create Premier Midwestern Bank

    • Share:
    June 09, 2021
    • $45 billion in total assets and $34 billion in total deposits
    • Unlocks immediate scale and positions for continued in-market growth
    • Accelerates opportunities to strengthen communities and drive positive change
    • Transaction expected to close in late 2021 or early 2022
    Evansville, Ind. and Chicago, Ill. June 1, 2021 –Old National Bancorp (“Old National”) (NASDAQ: ONB) and First Midwest Bancorp, Inc. (“First Midwest”) (NASDAQ: FMBI), jointly announced today they have entered into a definitive merger agreement to combine in an all-stock merger of equals transaction with a total market value of $6.5 billion to create a premier Midwestern bank with $45 billion in combined assets.

    With nearly 270 combined years of service and a shared commitment to Midwestern values, Old National and First Midwest are two organizations driven by a customer-centric approach to banking, an unwavering commitment to community and a strong focus on corporate social responsibility, making the combined entity the premier choice for employees, clients and shareholders.

    Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, First Midwest stockholders will receive 1.1336 shares of Old National common stock for each share of First Midwest common stock they own. Following completion of the transaction, former First Midwest stockholders are expected to collectively represent approximately 44% of the combined company. The new organization will operate under the Old National Bancorp and Old National Bank names, with dual headquarters in Evansville, Indiana and Chicago, Illinois. Michael Scudder, Chairman and CEO of First Midwest Bancorp, will serve as the Executive Chairman and Jim Ryan, Chairman and CEO of Old National Bancorp, will maintain his role as CEO.

    Additional leadership positions for the combined entity include:
    • Mark Sander, President and Chief Operating Officer (First Midwest)
    • Jim Sandgren, CEO of Commercial Banking (Old National)
    • Brendon Falconer, Chief Financial Officer (Old National)
    • Kendra Vanzo, Chief Administrative Officer (Old National)
    • Kevin Geoghegan, Chief Credit Officer (First Midwest)
    • Thomas Prame, CEO of Community Banking (First Midwest)
    • Chady AlAhmar, CEO of Wealth Management (Old National)
    The complete executive leadership team is expected to be announced prior to close. The Board of Directors of the combined company will have 16 directors, consisting of 8 directors from Old National and 8 directors from First Midwest. Becky Skillman, lead independent director for Old National, will retain this position in the combined company.

    “First Midwest and Old National are two relationship-focused financial institutions that have rich histories, extremely compatible cultures and a shared commitment to helping our clients achieve financial success,” said Michael Scudder, Chairman and CEO of First Midwest. “As a combined organization, we will be in an even stronger position to invest, grow and innovate in talent, capabilities and services that will enhance an already superior client experience and further set us apart as a market leader not only in Chicago but across the Midwest.”
    “First Midwest’s leadership team and colleagues not only mirror the Old National mission, values and culture, they also offer exceptional consumer and commercial banking services,” said Old National Chairman and CEO Jim Ryan. “We are confident that the powerful synergies, additional market coverage and financial strength this partnership creates will drive long-term shareholder value, and we are excited about combining the outstanding legacies of two strong, client- and community-focused organizations.”

    Delivering Exceptional Value to Clients, Employees and Communities
    Strategic benefits of the merger include:
    • Strengthened market position: The combined organization will create the sixth largest bank headquartered in the Midwest, with a presence in six of the largest Midwestern MSAs, strong commercial banking capabilities, a robust retail footprint and a significant wealth platform. The two banks have virtually no service area overlap, limiting disruption.
    • Top-tier commercial and community bank: With a larger balance sheet, more diverse geographic footprint and deeper product suite, the combined company will have increased capability to serve both existing and new clients and compete with the largest banks in the region.
    • Digital and technology capabilities: The combined organization creates the scale and profitability to accelerate digital and technology capabilities to drive future investments in consumer, wealth management and commercial banking services.
    • Culture and employee focus: From First Midwest’s multiple recognitions as a Best Place to Work to Old National’s 10-year run as one of the World’s Most Ethical companies, the combined institution will remain committed to fostering a strong culture of collaboration and trust, empowering its employees to flourish.
    • Community engagement: The merger enables the combined entity to build on both organizations’ longstanding history of service, enhance its ability to champion community initiatives and drive positive change throughout its footprint.
    Delivering Financially Compelling Benefits to Shareholders
    • Significant earnings per share accretion to both companies in 2022: ~22% GAAP EPS accretion to Old National and ~35% GAAP EPS accretion to First Midwest, assuming fully phased in cost savings and excluding merger charges.
    • Top quartile pro forma profitability: The combined company is expected to generate an ROATCE of ~15% in 2022, assuming fully phased in cost savings.
    • Modest tangible book value per share earnback: ~3.2 years under the crossover method.
    Timing
    The transaction is expected to close in late 2021 or early 2022 subject to customary closing conditions, including regulatory and shareholder approvals.

    Transaction Advisors
    Keefe, Bruyette & Woods, A Stifel Company, served as exclusive financial advisor and Squire Patton Boggs (US) LLP acted as legal advisor to Old National.

    J.P. Morgan Securities LLC served as exclusive financial advisor and Sullivan & Cromwell LLP acted as legal advisor to First Midwest.

    Joint Investor Call
    Management of both Old National and First Midwest will hold a conference call at 10:00 A.M. (CT) on Tuesday, June 1, 2021, to discuss their partnership. The live audio web cast of the call, along with the corresponding presentation slides, will be available on Old National’s and First Midwest’s Investor Relations web pages at oldnational.com and firstmidwest.com respectively, as well as the following url: https://services.choruscall.com/links/onb210601.html.

    ABOUT OLD NATIONAL
    Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $23.7 billion in assets, it ranks among the top 100 banking companies in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for 10 consecutive years. Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building longterm, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Illinois, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

    About First Midwest
    First Midwest (NASDAQ: FMBI) is a relationship-focused financial institution and one of the largest independent publicly traded bank holding companies based on assets headquartered in Chicago and the Midwest, with approximately $21 billion of assets and an additional $14 billion of assets under management. First Midwest Bank and First Midwest's other affiliates provide a full range of commercial, treasury management, equipment leasing, consumer, wealth management, trust and private banking products and services. The primary footprint of First Midwest's branch network and other locations is in metropolitan Chicago, southeast Wisconsin, northwest Indiana, central and western Illinois, and eastern Iowa. Visit First Midwest at firstmidwest.com.