Old Second Bancorp ("Old Second") and Bancorp Financial ("Bancorp Financial", "Evergreen Bank") jointly announced the signing of a definitive merger agreement for Old Second to acquire Bancorp Financial and its wholly-owned bank subsidiary, Evergreen Bank Group, in a cash and stock transaction.

Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both companies, Bancorp Financial stockholders will receive 2.5814 shares of Old Second common stock and $15.93 in cash for each share of Bancorp Financial's common stock, for total consideration consisting of approximately 75% stock and 25% cash. Based on the closing price of Old Second common stock of $18.08 per share on Feb. 24, 2025, the implied purchase price is $62.60 per Bancorp Financial common share, with an aggregate transaction value of approximately $197 million.

Darin Campbell, Chairman of Bancorp Financial, stated, "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. 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."

Campbell continued, "I am equally proud of what we have built nationally with our FreedomRoad Financial and Performance Finance divisions, establishing two of the most recognizable brands in powersport lending across the country. By joining forces with Old Second, we are combining our strengths and shared values to create a better bank, offering enhanced services and opportunities for our employees, customers, key partnerships, and the communities we serve. Together, we are poised to make an even greater impact and continue our legacy of excellence in banking."

"We are extremely pleased to announce the combination with Evergreen Bank," commented James Eccher, Chairman, President and CEO of Old Second Bancorp. "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. I believe this transaction offers a terrific pro forma balance sheet profile by combining the strength of Old Second's funding profile with the yield resiliency of Evergreen's unique asset strategies. We believe the combined income statement offers significantly less volatility and a stronger earnings profile in all rate environments. Additionally, we are extremely excited to welcome Darin and his team into our management team. In getting to know Darin and his team, it has become clear that our cultures are highly compatible with a shared commitment to serving clients that will benefit all constituents."

"Evergreen Bank is a respected industry leader for powersports lending as well as other consumer lending products. It has built a top-notch reputation by providing first class service to its customers and communities. Given our overlapping core principles and expanded product and service offerings, we believe this merger creates a compelling path forward for the stockholders of both institutions. From an Old Second perspective, we believe the combination will diversify our revenue streams, enhance our management depth and provide a continuing opportunity to drive long-term stockholder value. Most importantly, we believe it enhances our competitive position in Chicago and increases the financial flexibility to continue to build the best bank possible for our customers and communities."

Strategically Compelling Merger

Significantly Enhances Scale: The pro forma company will have approximately $7.1 billion in assets, $6.0 billion in deposits and $5.2 billion in loans and will create the second largest community bank under $10 billion in assets in the Chicago market. Together, the combined company will have significant strategic positioning with the scale to compete and prioritize investments in technology and growth.

Enters New Markets: The loan products offered by Evergreen will expand Old Second's reach into new markets with the expertise of a proven leader in the powersport lending business.

Leverages our Premier Deposit Franchise: The combination will leverage our low cost, core deposit franchise to support the combined banks' diversified asset base with 56 branches across the Chicagoland area, strong retail deposit concentration and top-quartile deposit beta.

Provides Platform for Growth: The pro forma company will have meaningful excess liquidity and pro forma capital generating capacity.

Financially Attractive Merger

Delivers Value for Stockholders: The merger is expected to deliver ~16% EPS accretion to Old Second stockholders in the first full year when including expected cost savings on a fully phased-in basis.

Improves Profitability: On a pro forma basis, we expect the combined company to deliver improved returns, with a projected increase in return on assets of over 13 bps and an increase in return on tangible common equity of over 267 bps when including expected cost savings on a fully phased-in basis.

Excess Capital Deployment: The acquisition is expected to provide Old Second with the opportunity to deploy existing excess capital at a 20%+ internal rate of return, while continuing to maintain strong capital ratios.

Timing and Approvals

The merger is expected to close in the third quarter of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by the stockholders of Bancorp Financial.

Advisors

Piper Sandler & Co. acted as financial advisor to Old Second. Nelson Mullins Riley & Scarborough LLP served as legal counsel to Old Second.

Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to Bancorp Financial and rendered a fairness opinion to its board of directors. Vedder Price P.C. served as legal counsel to Bancorp Financial.