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Midland States Bancorp, Inc. to Acquire HomeStar Financial Group

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Midland States Expands South of Chicago with HomeStar Purchase

The Barack Ferrazzano Financial Institutions Group acted as legal counsel to Midland States Bancorp, Inc. (Nasdaq: MSBI) (the "Company" or "Midland") in connection with its definitive agreement to acquire 100% of HomeStar common stock, and its wholly owned subsidiary HomeStar Bank and Financial Services (“HomeStar Bank”), in exchange for 405,000 shares of Midland common stock. 

Headquartered in Manteno, Illinois, HomeStar Bank is a five branch full-service community bank serving communities for over 70 years. As of December 31, 2018, HomeStar had approximately $375 million in assets, $223 million in loans, and $333 million in deposits.

Based on Midland's April 1, 2019, common stock closing price of $24.46, the transaction has a value to HomeStar shareholders of approximately $9.9 million assuming adjusted shareholders' equity of HomeStar at closing of $10.4 million. The value of the actual consideration paid will adjust dollar-for-dollar (up or down) with respect to HomeStar's shareholders' equity at closing.

Midland expects the transaction to be approximately 9% accretive to earnings per share in 2020, and expects to incur tangible book value per share dilution of approximately 2% upon the closing of the transaction, with an expected earn-back period of approximately 2 years.

Under the terms of the definitive agreement, prior to, or concurrent, with closing, HomeStar’s outstanding TruPS will be redeemed with $23.5 million of cash provided by Midland, at a discount to par value plus accrued interest, generating an expected gain of approximately $11.7 million. Additionally, HomeStar will sell its interests in both its Insurance Agency and Title Company business lines. The transaction is expected to close in the third quarter of 2019, subject to regulatory approvals, shareholder approval, and the satisfaction of customary closing conditions.

Barack Ferrazzano’s team was led by Dennis R. Wendte, Bill Fay, and Emily N. Henkel.

To learn more about this transaction, visit: https://www.globenewswire.com/news-release/2019/04/02/1795833/0/en/Midland-States-Bancorp-Inc-to-Acquire-HomeStar-Financial-Group-Inc.html

Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of December 31, 2018, the Company had total assets of $5.6 billion and its Wealth Management Group had assets under administration of approximately $2.9 billion. Midland provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, and insurance and financial planning services.

To learn more, visit: www.midlandsb.com

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