Old Second strikes $197M deal to bolster Chicago footprint

Old Second Bancorp in Illinois plans to acquire in-state peer Bancorp Financial for $197 million in cash and stock, the two banks announced on Tuesday.

The merger combines a pair of community banks in the Chicago area. Old Second, which is based in Aurora, is the parent company of Old Second National Bank. It has 53 branches across the northern part of the state. Bancorp Financial, headquartered in Oak Brook, owns Evergreen Bank Group, which has three locations in DuPage and Cook counties.

"We are extremely pleased to announce the combination with Evergreen Bank," James Eccher, Old Second's CEO, said in a statement. "The partnership provides us with an exciting opportunity to continue to expand our presence in the greater Chicago markets as well as adding meaningful consumer lending capabilities that we have long lacked."

At the end of 2024, Old Second had $5.7 billion of assets. After acquiring Bancorp Financial, the combined company would grow to $7.1 billion, making it the second largest community bank in the Chicago area, according to Old Second.

The pro forma bank would also have $6 billion of deposits, $5.2 billion of loans and 56 branches across the Chicago region. In addition, one analyst said, Old Second would also gain some valuable talent.

"On top of that, they get some management depth," Brian Martin, director of equity research at Janney Montgomery Scott, told American Banker. "It's tough to find a good management team, and this team [Bancorp Financial] has been a high-performing team in this space."

Overall, Martin said he was "pretty positive" about the merger.

"I think it makes a lot of sense," Martin said. "It gives them more scale, it improves upon their already strong profitability, it diversifies their balance sheet, and they still continue to have capital flexibility to pursue buybacks."

The acquisition is set to close in the third quarter of 2025, pending the approval of regulators and the stockholders of Bancorp Financial. Both banks' boards of directors have unanimously approved the deal.

M&A

UMB's CEO reflects after closing biggest deal of his career

February 5, 2025 12:00 PM

"Bancorp Financial and its wholly owned subsidiary, Evergreen Bank Group, are thrilled to announce the merger with Old Second, a move that is expected to create a stronger banking institution for our customers and communities of nearly 18 years," Darin Campbell, CEO of Bancorp Financial, said in a statement. "I could not be more proud of the team, the bank we have built together, and the positive impact we've made in the western suburbs of Chicago and the neighborhoods surrounding our oldest branch in Evergreen Park."

Old Second has been using mergers and acquisitions to grow its footprint in recent years. In August 2024, the bank bought five branches from First Merchants, an Indiana-based financial firm, for $23 million. The purchase expanded Old Second's presence in Chicago's southeastern suburbs.

Before that, Old Second acquired its local rival, West Suburban Bancorp, for about $297 million in 2021. That deal made Old Second the second largest bank based in the Chicago area, just behind Wintrust Financial in Rosemont, Illinois.

Old Second's purchase of Bancorp Financial is the third most valuable bank acquisition announced so far in 2025. To date, Glacier Bancorp of Kalispell, Montana holds the No. 1 spot with its $245.4 million plan to buy Bank of Idaho Holding Co. in Idaho Falls.