Old Second Bancorp, Inc. (NasdaqGS:OSBC) entered into a definitive merger agreement to acquire West Suburban Bancorp, Inc. (OTCPK:WNRP) from West Suburban Bancorp Inc, Esop, and others for $300 million on July 25, 2021. The consideration will be paid in cash and stock. Under the terms of the merger agreement, West Suburban shareholders will receive 42.413 shares of Old Second common stock and $271.15 in cash for each share of West Suburban common stock, for total consideration consisting of approximately 65% stock and 35% cash. Immediately following the Merger, or at such later time as the parties may mutually agree, West Suburban Bank, wholly-owned subsidiary of West Suburban, will merge with and into Old Second National Bank, wholly-owned subsidiary of Old Second, with Old Second National Bank continuing as surviving bank. Merger will result in pro forma ownership for West Suburban shareholders of 36%. Termination fee of $11,875,000 will be payable by West Suburban to Old Second upon termination of agreement under certain circumstances.

After Effective Time, respective boards of directors of Old Second and Old Second National Bank will each be increased in size by three, and three current members of the board of directors of West Suburban, which members will be mutually agreed to by Old Second and West Suburban. Upon close of transaction, Old Second expects to welcome Keith Acker and 2 other West Suburban directors to our Board of Directors. Team members of West Suburban to join Old Second.

Completion of merger is subject to customary conditions, including, among others, adoption of agreement and transactions contemplated thereby by holders of Old Second common stock, approval of the Merger Agreement and the transactions contemplated thereby by the holders of West Suburban common stock, receipt of required regulatory approvals including approval of Board of Governors of Federal Reserve System (in connection with Merger) and Office of Comptroller of Currency (in connection with Bank Merger) effectiveness under Securities Act of 1933, as amended, of Registration Statement on Form S-4 for Old Second common stock to be issued in the Merger, (f) authorization for listing on Nasdaq Stock Market of the shares of Old Second common stock to be issued in Merger and additional customary conditions. Agreement was unanimously approved by the Boards of Directors of both companies. As of October 1, 2021, Controller of Currency approved transaction on September 30, 2021. As of October 14, 2021, transaction has received bank regulatory approvals. Old Second and West Suburban each has received shareholder approval for merger. Merger is expected to close in the fourth quarter of 2021. As of October 14, 2021, transaction is expected to close in early December 2021. As on November 30, 2021, merger is expected to close on December 1, 2021. Merger is expected to deliver 38% accretion to Old Second's 2022 earnings per share, when including expected cost savings on a fully phased-in basis. Janney analyst Brian Martin said the EPS accretion is substantial, but he estimated Old Second would need nearly five years to earn back "large" tangible book value dilution of 18%.

Citigroup Global Markets Inc. acted as financial advisor to Old Second and rendered a fairness opinion to its board of directors. Old Second will pay Citigroup a fee of $3 million for the delivery of Citi's opinion, $600,000 of which was payable upon delivery by Citi of the opinion. Ann Murray, Maurice Holloway, Allie Nagy, John Willis and J. Brennan Ryan of Nelson Mullins Riley & Scarborough LLP served as legal counsel to Old Second. Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to West Suburban and rendered a fairness opinion to its board of directors. West Suburban agreed to pay Keefe, Bruyette & Woods a cash fee currently estimated to be $3.1 million, $500,000 of which became payable with the rendering of opinion. Edwin S. del Hierro of Kirkland & Ellis LLP and Andrew K. Strimaitis and Donald L. Norman of Barack Ferrazzano served as legal counsel to West Suburb. Georgeson LLC is acting as proxy solicitor to West Suburb and will receive a fee of $14,500 plus certain expenses.