Byline Bancorp and First Security Bancorp entered into a definitive merger agreement pursuant to which First Security Bancorp and its wholly owned subsidiary, First Security Trust and Savings Bank, will combine with Byline Bancorp in a cash and stock transaction valued at approximately $41 million based upon Byline’s closing stock price as of Sept. 27, 2024.

“First Security Trust and Savings Bank is a highly respected financial institution that shares our core values of exceptional customer service and building lasting relationships within the communities we serve and call home,” Roberto R. Herencia, executive chairman and CEO of Byline Bancorp, said. “At Byline, our M&A strategy is centered on finding the right partners — those who align with our values and strengthen our presence in complementary markets.”

“We are pleased to add this high-quality and complimentary Chicagoland franchise through a partnership that aligns with our strategy of being the preeminent commercial bank in Chicago. First Security brings a solid core deposit base that further enhances balance sheet flexibility, while its loan mix adds valuable diversification to our portfolio,” Alberto J. Paracchini, president of Byline Bancorp, said. “Together, we believe this partnership will enhance our financial position, drive sustainable growth and create long-term value for our stockholders, all while reinforcing our commitment to our core markets and staying true to our local roots. We are excited to welcome First Security customers to Byline and look forward to serving them with the same dedication and excellence they’ve come to expect.”

“By joining forces with Byline, we are aligning with a partner that shares our commitment to exceptional customer service, innovation and community focus,” Danny Wirtz, chairman and CEO of First Security Bancorp, said. “First Security Bancorp was founded on the principles of offering tailored products and services to meet our customers’ financial needs, and this partnership will further those principles. We believe Byline can leverage First Security’s strengths to drive continued growth in the Chicago market, while also creating greater value for our customers and the communities we serve.”

Under the terms of the definitive merger agreement, at the closing of the transaction, Byline will issue 2.1794 shares of its common stock for each outstanding share of First Security Bancorp common stock, or approximately 1.5 million shares to First Security Bancorp common stockholders, subject to adjustment per the terms of the agreement. Based upon the closing price of Byline’s common stock of $26.16 on Sept. 27, 2024, this represents a transaction value of approximately $38.4 million or $57.01 per First Security Bancorp common share. Outstanding First Security Bancorp preferred shares will be redeemed in cash at closing with an estimated aggregate value of approximately $2.6 million in accordance with the terms of the certificate of designation.

The transaction has been approved unanimously by each company’s board of directors and is expected to close during Q2/25 and is subject to regulatory approvals, the approval of First Security Bancorp’s stockholders and the satisfaction of certain other closing conditions.

Stephens served as financial advisor to Byline, and Vedder Price served as Byline’s legal advisor. D.A. Davidson served as financial advisor to First Security Bancorp, and Barack Ferrazzano Kirschbaum & Nagelberg served as First Security Bancorp’s legal advisor.