Byline Bancorp agreed to acquire Illinois State Bancorp in a cash-and-stock transaction valued at approximately $87.9 million. The value was calculated using Byline's closing share price on 5 October. Illinois State is the parent of First Nations Bank and The Bank of Bourbonnais. The transaction is expected to close in the first quarter of 2027, subject to shareholder and regulatory approvals and other customary conditions.
Illinois State reported approximately $617.3 million of assets, $470.5 million of loans and $510.5 million of deposits at 30 June. Byline had about $9.9 billion of assets and 44 branches when the agreement was announced. If completed, the combined franchise would operate 48 branches with approximately $10.5 billion of assets, $8.0 billion of loans and $8.4 billion of deposits. The transaction would deepen Byline's presence across the Chicago area and add Illinois State's operations in Chicagoland and Kankakee County.
TRANSACTION TERMS AND BALANCE SHEET
Byline plans to issue approximately 1.4 million common shares and pay $28.9 million in cash to Illinois State shareholders at closing. It also expects to pay about $5.1 million to settle outstanding Illinois State stock options. The fixed exchange ratio is 4.5208 Byline shares for each Illinois State common share, producing an indicated value of $261.23 per target share at the reference price.
Byline's presentation valued the deal at 1.07 times Illinois State's tangible book value and 13.1 times its last-12-month earnings. The buyer projected tangible-book-value dilution of 1.2%, with earnback in less than 18 months, and mid-single-digit earnings-per-share accretion. Those estimates are management forecasts and depend on completion, integration and the delivery of planned savings.
APPROVALS AND INTEGRATION
The boards of both companies unanimously approved the agreement. Illinois State shareholders must still vote on the transaction, while the parties also require customary regulatory clearances. Byline said the target would add a stable deposit base and commercial banking relationships in communities where it wants greater market density.
The next formal milestone will be Byline's registration statement and proxy materials, which should provide further information for Illinois State shareholders. Regulatory decisions and the shareholder vote will determine whether the companies can meet their first-quarter timetable. Until those conditions are satisfied, the businesses remain separate and the projected balance-sheet and earnings effects remain conditional.