- Headquartered in Chaska, Minnesota, Klein Financial, Inc. is one of Minnesota’s largest community banks serving the Twin Cities and surrounding markets
- As of March 31, 2018, KleinBank had $2.0 billion in total assets, $1.1 billion in loans, $1.7 billion in deposits, $184 million in common shareholders’ equity and 18 full-service banking locations
- Combined with recent Anchor Bank partnership, moves Old National to #5 market share in the Twin Cities
- Anticipated closing in 4th quarter 2018
Evansville, Indiana-based Old National Bancorp (“Old National”) (NASDAQ: ONB) and Minnesota-based Klein Financial, Inc. (“Klein”), jointly announced today the execution of a merger agreement under which Old National will acquire Klein through a 100% stock merger.
With $2.0 billion in total assets, $1.1 billion in total loans, $1.7 billion in deposits, and $184 million in common shareholder’s equity as of March 31, 2018, Klein is a bank holding company with KleinBank as its wholly-owned subsidiary. Noted for its strong retail presence, KleinBank operates 18 full-service branches. Founded in 1907 and headquartered in Chaska, Minnesota, it is the largest family-owned community bank serving the Twin Cities and its western communities.
This transaction greatly strengthens and complements Old National’s recent expansion into the demographically attractive and economically vibrant Twin Cities market. On a pro forma basis based on March 31, 2018 balances, Old National will have total deposits in Minnesota of approximately $3.5 billion, which equals the fifth largest market share position in both the Minneapolis metropolitan statistical area (“MSA”) and the state. The Minneapolis MSA will also become Old National’s largest deposit MSA. In addition, Old National will become the fourth largest community bank headquartered within its five-state footprint.
“We are humbled by the confidence of the Klein family in choosing Old National as their partner,” said Old National Chairman and CEO, Bob Jones. “We look forward to continuing the legacy of exceptional client service and strong community engagement that has defined KleinBank for more than 110 years and four generations. The addition of Klein’s powerful retail franchise, as evidenced by their low loan to deposit ratio of 64% and their outstanding business banking and fee-based teams, complement the already-excellent commercial team and strong performance that we have seen to date at our recently completed Anchor Bank partnership. We believe the enhanced scale, product capability, and market coverage that this combination creates positions us exceptionally well in the Twin Cities – a market that remains economically vibrant with unique competitive dynamics that play into the strengths of our business model.”
“We believe that partnering with Old National will provide tremendous benefits to our customers, our communities and our KleinBank team members,” said KleinBank CEO Doug Hile. “We share a special commitment to exceptional service, local responsiveness and community leadership, and we are excited to take this commitment to the next level to the benefit of all.”
Under the terms of the merger agreement, Klein shareholders will receive 7.92 shares of Old National common stock for each share of common stock of Klein they hold. Based on Old National’s closing share price on June 20, 2018, of $19.05, this represents a total transaction value of approximately $433.8 million. The transaction value is likely to change due to fluctuations in the price of Old National common stock and is also subject to adjustment under certain circumstances as provided in the merger agreement. Old National expects the acquisition to be 6.2% accretive to earnings per common share in 2020, including fully realized cost savings, and 3.4% dilutive to tangible book value per share at closing with an earnback period of approximately 3.5 years. The merger agreement has been unanimously approved by the Board of Directors of both Old National and Klein. The transaction remains subject to customary closing conditions, including, but not limited to, regulatory approval and the vote of Klein shareholders. The transaction is anticipated to close in the 4th quarter of 2018.
Old National was advised by Keefe, Bruyette and Woods, Inc., a Stifel Company and the law firm of Krieg DeVault LLP. Klein was advised by Sandler O’Neill + Partners, L.P. and the law firm of Dorsey & Whitney LLP.
CONFERENCE CALL AND WEBCAST
Old National will hold a conference call at 10:00 a.m. Central Time on Thursday, June 21, 2018, to discuss the acquisition of Klein Financial, Inc. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from 7:00 a.m. Central Time on June 22 through July 6. To access the replay, dial 1-855-859-2056, Conference ID Code 5564266.
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 $17.5 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 seven consecutive years. Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships with clients. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Wisconsin and Minnesota. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investments and brokerage services. For more information and financial data, please visit Investor Relations at oldnational.com.
For 111 years, the Klein Family through Klein Financial Inc. and its wholly-owned subsidiary KleinBank, have been committed to growing a strong and stable community bank built on a foundation of financial and personal strength. Today, with 18 branches, more than 400 employees and assets of more than $2.0 billion, those strengths still guide KleinBank in its service to customers, employees and communities. Over the past few years, KleinBank has received recognition as a Star Tribune top workplace, for providing best in class for Business Banking and Mortgage Lending by the readers of Twin Cities Business, and as a recipient of the Better Business Bureau of Minnesota and North Dakota’s Torch Award for Ethics, as well as the Better Business Bureau International’s Torch Award for Ethics.