MB Financial buying Taylor Capital for $680M

MB Financial is buying Taylor Capital for about $680 million in a deal to increase its middle market commercial banking presence in the Chicago area.

Taylor Capital has nine branches, while MB Financial has 85 Chicago-area branches.

Taylor Capital Group Inc. is the holding company of Cole Taylor Bank, a commercial bank in Chicago with $5.9 billion in assets, $3.3 billion in loans and $3.7 billion in deposits as of June 30.

Chicago-based MB Financial is the holding company of MB Financial Bank NA.

MB Financial said Monday that it will pay $22 per share for Taylor Capital, a 24 percent premium to Taylor Capital’s closing price of $17.81 on Friday. With 29.1 million outstanding shares, according to FactSet, that would value the deal at $640.2 million.

But the companies said the deal was worth about $680 million including stock option, warrant and restricted stock cash-outs.

Once the buyout closes, each Taylor Capital share will be converted into the right to receive $4.08 in cash and 0.64318 shares of MB Financial Inc.

Taylor Capital President and CEO Mark Hoppe will become president and CEO of MB Financial subsidiary bank MB Financial Bank. Two of Taylor Capital’s board members, Jennifer Steans and C. Bryan Daniels, will join MB Financial’s board.

The transaction is expected to close during 2014’s first half. It still needs the approval of both companies’ shareholders.)

Taylor Capital also reported Monday that its second-quarter net income fell to $11.8 million, or 39 cents per share, from $12.5 million, or 41 cents per share, a year ago. The quarter included a $3.2 million after-tax expense for the early extinguishment of debt costs. Analysts expected earnings of 39 cents per share.

MB Financial posted second-quarter net income of $25.3 million, or 46 cents per share. That compares with $22.1 million, or 41 cents per share, in the prior-year period. Wall Street predicted earnings of 45 cents per share.