NorthWest Indiana Bancorp and AJS Bancorp, Inc. Announce Signing of Definitive Merger Agreement
NorthWest Indiana Bancorp (OTC Pink: NWIN) (“NWIN”), the parent of Peoples Bank SB, and AJS Bancorp, Inc. (OTC Pink: AJSB) (“AJSB”) announced today they have executed a definitive merger agreement whereby NWIN will acquire AJSB and its wholly-owned subsidiary, A.J. Smith Federal Savings Bank, of Midlothian, Illinois, in a stock and cash transaction. A copy of the definitive agreement is available as Exhibit 2.1 to the Form 8-K filed by NWIN today with the Securities Exchange Commission (the “SEC”) at the SEC’s internet site (http://www.sec.gov).
Under the terms of the merger agreement, stockholders of AJSB who hold 100 or more shares of AJSB common stock will receive 0.2030 shares of NWIN’s common stock and $7.20 in cash for each issued and outstanding share of AJSB common stock, subject to possible adjustment, for total consideration that consists of approximately 55% stock and 45% cash. Stockholders of AJSB holding less than 100 shares of AJSB common stock will have the right to receive $16.00 in cash and no stock consideration for each share of AJSB common stock. Based on NWIN’s closing stock price of $43.00 as of July 30, 2018, the merger consideration has an aggregate value of approximately $34.6 million, which represents approximately 109% of tangible book value, and which includes unallocated shares held by the AJSB Employee Stock Ownership Plan (“ESOP”), some of which will be cancelled at closing in order to satisfy the ESOP’s outstanding loan balance.
AJSB is a savings and loan holding company headquartered in Midlothian, Illinois with total consolidated assets of $191.8 million as of June 30, 2018. A. J. Smith Federal Savings Bank was established in 1924 and serves the Chicagoland metropolitan market with three full service locations.
“We are excited about this deal, and it is a great strategic, financial, and cultural fit. A.J. Smith was founded on the same principles as Peoples Bank – to serve its community – and this merger allows us to continue that tradition. It also grows our position in the South Suburban Chicagoland and Northwest Indiana markets as a locally managed, community focused financial institution. I look forward to working with Jerry Weberling, chief executive officer and chief financial officer of A.J. Smith, along with our Bank’s team to integrate the two companies and better serve our combined customers and communities,” said Benjamin Bochnowski, President and Chief Executive Officer.
“I am proud to announce the signing of a definitive agreement for our second acquisition, in less than six months, in the Chicagoland market. Our strategic goal has been to build a physical presence in that market, and, upon completion, this acquisition will give us six full-service Banking Centers in South Suburban Chicagoland. With 22 Banking Centers total, and $1.3 billion in assets, we will have the resources to fully serve our customers and deliver on our mission to help our customers and communities be more successful,” said Bochnowski.
“We are excited about the opportunity to become part of the Peoples Bank family and believe this partnership will be good for our customers, shareholders, employees and communities,” said Jerry A. Weberling, AJSB’s Chief Executive Officer, President and Chief Financial Officer. “Joining forces with Peoples Bank will greatly enhance our product and service offerings and significantly expand our delivery channels. Our customers will benefit from Peoples Bank’s broader suite of products and services, including expanded commercial lending, trust and wealth management, mobile banking and mortgage banking services. The core values of both companies share a commitment to personal service, long-term relationships and community involvement.”
NWIN expects the merger to be approximately $0.25 accretive to 2019 earnings per share (excluding one-time deal related charges), approximately 0.8% dilutive to tangible book value at closing, and expects the tangible book value earnback to be approximately 2.2 years using the cross-over method. Upon closing of the transaction, both Peoples Bank and NWIN expect to remain above well-capitalized standards on all regulatory capital ratios.
The merger is expected to be completed early in the first quarter of 2019, subject to approval by bank regulatory authorities and the shareholders of AJSB, as well as the satisfaction of other customary closing conditions. Additionally, A.J. Smith Federal Savings Bank will be merged with and into Peoples Bank, and the combined operations will be continued under the Peoples Bank name.
NWIN was advised by Stephens Inc. and Barnes & Thornburg LLP as legal counsel. AJSB was advised by, and received a fairness opinion from, Keefe Bruyette & Woods, and was advised by Luse Gorman, PC as legal counsel.
About NorthWest Indiana Bancorp
NorthWest Indiana Bancorp is a locally managed and independent financial holding company headquartered in Munster, Indiana, whose activities are primarily limited to holding the stock of Peoples Bank. Peoples Bank provides a wide range of personal and business financial services from its 19 locations in Lake and Porter Counties in Northwest Indiana and South Suburban Chicagoland. NorthWest Indiana Bancorp’s common stock is traded on the OTC Bulletin Board and the OTC Pink Marketplace under the symbol NWIN. The website ibankpeoples.com provides information on Peoples Bank’s products and services, and NorthWest Indiana Bancorp’s investor relations.
About AJS Bancorp
AJS Bancorp, Inc. is a savings and loan holding company headquartered in Midlothian, Illinois. AJSB’s subsidiary, A.J. Smith Federal Savings Bank, is a retail customer-oriented institution, operating from its main office in Midlothian, Illinois, and two branch offices in Orland Park, Illinois whose primary business activity is the origination of one- to four-family real estate loans funded with a variety of consumer deposit accounts. Information about A.J. Smith’s products and services can be found on its website, www.ajsmithbank.com.