Transaction expected to create significant shareholder value
Fifth Third Bancorp (Nasdaq: FITB; www.53.com)
and MB Financial, Inc. (Nasdaq: MBFI; www.mbfinancial.com)
jointly announced today the signing of a definitive merger agreement
under which MB Financial, Inc. (“MB Financial”) will merge with Fifth
Third Bancorp (“Fifth Third”) in a transaction valued at approximately
$4.7 billion. Approximately 90 percent of the consideration will be in
stock with the rest in cash.
Based on the closing price of Fifth Third’s common shares on May 18,
2018, common shareholders of MB Financial will receive $54.20 of total
consideration, consisting of 1.45 shares of Fifth Third common stock and
$5.54 in cash for each share of MB Financial common stock. The
consideration implies a premium of approximately 24 percent to MB
Financial’s closing share price on May 18, 2018. In conjunction with the
closing of the transaction, two members of MB Financial’s Board of
Directors are expected to join the Fifth Third Bancorp Board.
Chicago-based MB Financial is the holding company for MB Financial Bank,
N.A. MB Financial has approximately $20 billion in assets with a history
of successfully serving the Chicago market for over 100 years. MB
Financial is well recognized as a leader in serving middle-market
customers, for its strong deposit franchise, and for its customer
centric corporate culture.
The merger will result in a total Chicago deposit market share of 6.5
percent, ranking the combined company fourth in total deposits and
second in estimated retail deposits among the nearly 200 banks in the
marketplace. Additionally, the combined company will have a 20 percent
share of middle market relationships in Chicago, ranking it second.
“There were no other potential partners of the same caliber as MB
Financial in the Chicago market, and we are very pleased to reach an
agreement to merge our companies. We view MB Financial as a unique
partner in our efforts to build scale in this strategically important
market. Customers of both banks will benefit from greater convenience
and the complementary capabilities that our banks, together, can offer,”
said Greg D. Carmichael, chairman, president and CEO of Fifth Third
Bancorp.
“In addition to its strategic importance, this merger is expected to
drive significant financial benefits. We expect our investment to
generate an IRR of approximately 18.5 percent and to be accretive to our
operating EPS in the first year, with accretion of nearly 7 percent in
the second year, once cost savings are fully realized. Furthermore, we
not only expect the merger to accelerate our progress towards our
NorthStar financial targets but also raise them above our previous
guidance,” Carmichael added.
“This merger also allows us to leverage MB Financial’s talented
management team. That begins with the selection of Mitch Feiger as
Chairman and CEO for our Chicago region, and we expect it to include
other key members of the MB Financial leadership team. On a combined
basis, we will have the best talent in the market,” Carmichael commented.
“Teaming up with Fifth Third allows us to leverage our complementary
capabilities for the benefit of our customers and the communities we
serve,” said Mitchell Feiger, president and CEO of MB Financial. “I am
very excited to lead the combined organization in Chicago. Our
commercial expertise and strong credit culture complement the strengths
of Fifth Third in large corporate lending, capital markets, wealth
management and the payments business. Both organizations are committed
to a successful integration.”
“We both have a history of keeping the customer at the center of all we
do and improving lives in the communities we serve. We are proud that
both Fifth Third and MB Financial have received ‘Outstanding’
performance evaluations under the Community Reinvestment Act,” Feiger
further added.
Over the last two years, Fifth Third has invested $1.9 billion in the
Chicago region, ahead of the originally planned pace of its five-year
Community Commitment. As a result of the combination, Fifth Third plans
to further increase its Chicago area commitment, after consultation with
its Community Advisory Forum.
The transaction is expected to reduce Fifth Third’s regulatory common
equity Tier 1 (CET1) ratio by approximately 45 basis points. The pro
forma tangible common equity to tangible assets (TCE) ratio of the
combined entity is projected to be 8.2 percent at closing.
Fifth Third intends to complete its 2017 CCAR buyback plan by
repurchasing up to $235 million of its shares of common stock before the
beginning of the proxy solicitation in connection with the MB Financial
shareholder vote on the transaction, and, subject to regulatory
approvals, may repurchase additional shares after the vote. The timing
and amount of this repurchase activity is subject to market conditions
and applicable securities laws.
The transaction is subject to the satisfaction of all customary closing
conditions, including regulatory approvals as well as the approval of MB
Financial shareholders.
Citi served as financial advisor and Simpson Thacher & Bartlett LLP
served as legal advisor to Fifth Third. Sandler O’Neill + Partners
served as financial advisor and Silver Freedman, Taff & Tiernan LLP and
Vedder Price served as legal counsel to MB Financial.
Conference Call/Webcast Information
Fifth Third’s management team and MB Financial‘s CEO Mitch Feiger will
host a conference call at 9:00 AM ET (8:00 AM CT) on May 21, 2018, to
discuss the strategic and financial implications of the business
combination. The call may be accessed via webcast through the Fifth
Third Investor Relations website at www.53.com,
under the Investor Events section. Those unable to listen to the live
call may access a webcast replay through the Fifth Third Investor
Relations website. Additionally, a telephone replay of the conference
call will be available until approximately June 6, 2018 by dialing (800)
585-8367 for domestic access or (404) 537-3406 for international access
(passcode 4869329#). Materials may be accessed through the Investor
Relations section of Fifth Third’s website at approximately 6:30 AM ET
(5:30 AM CT).
About Fifth Third Bancorp (Nasdaq: FITB)
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of March 31, 2018, the Company had
$142 billion in assets and operated 1,153 full-service Banking Centers
and 2,459 ATMs with Fifth Third branding in Ohio, Kentucky, Indiana,
Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North
Carolina. In total, Fifth Third provides its customers with access to
more than 54,000 fee-free ATMs across the United States. Fifth Third
operates four main businesses: Commercial Banking, Branch Banking,
Consumer Lending and Wealth & Asset Management. Fifth Third is among the
largest money managers in the Midwest and, as of March 31, 2018, had
$363 billion in assets under care, of which it managed $37 billion for
individuals, corporations and not-for-profit organizations through its
Trust and Registered Investment Advisory businesses. Investor
information and press
releases can be viewed at www.53.com.
Fifth Third’s common stock is traded on the Nasdaq® Global Select Market
under the symbol “FITB.” Fifth Third Bank was established in 1858.
Member FDIC.
About MB Financial, Inc. (Nasdaq: MBFI)
MB Financial, Inc. is the Chicago-based holding company for MB Financial
Bank, which has approximately $20 billion in assets and a more than one
hundred year history of building deep and lasting relationships with
middle-market companies and individuals. MB offers a full range of
powerful financial solutions and the expertise and experience of bankers
who are focused on their clients’ success. Learn more about MB
Financial, Inc. at http://mbfinancial.com
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger, Fifth Third Bancorp will file
with the SEC a Registration Statement on Form S-4 that will include the
Proxy Statement of MB Financial, Inc. and a Prospectus of Fifth Third
Bancorp, as well as other relevant documents concerning the proposed
transaction. This communication does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a solicitation of
any vote or approval. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE
MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
A free copy of the Proxy Statement/Prospectus, as well as other filings
containing information about Fifth Third Bancorp and MB Financial, Inc.,
may be obtained at the SEC’s Internet site (http://www.sec.gov).
You will also be able to obtain these documents, free of charge, from
Fifth Third Bancorp at ir.53.com or from MB Financial, Inc. by accessing
MB Financial, Inc.’s website at investor.mbfinancial.com. Copies of the
Proxy Statement/Prospectus can also be obtained, free of charge, by
directing a request to Fifth Third Investor Relations at Fifth Third
Investor Relations, MD 1090QC, 38 Fountain Square Plaza, Cincinnati, OH
45263, by calling (866) 670-0468, or by sending an e-mail to ir@53.com
or to MB Financial, Attention: Corporate Secretary, at 6111 North River
Road, Rosemont, Illinois 60018, by calling (847) 653-1992 or by sending
an e-mail to dkoros@mbfinancial.com.
Fifth Third Bancorp and MB Financial, Inc. and certain of their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of MB
Financial, Inc. in respect of the transaction described in the Proxy
Statement/Prospectus. Information regarding Fifth Third Bancorp’s
directors and executive officers is contained in Fifth Third Bancorp’s
Annual Report on Form 10-K for the year ended December 31, 2017 and its
Proxy Statement on Schedule 14A, dated March 6, 2018, which are filed
with the SEC. Information regarding MB Financial, Inc.’s directors and
executive officers is contained in its Proxy Statement on Schedule 14A
filed with the SEC on April 3, 2018. Additional information regarding
the interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the Proxy
Statement/Prospectus regarding the proposed merger when it becomes
available. Free copies of this document may be obtained as described in
the preceding paragraph.
FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
including, but not limited to, Fifth Third Bancorp’s and MB Financial,
Inc.’s expectations or predictions of future financial or business
performance or conditions. Forward-looking statements are typically
identified by words such as “believe,” “expect,” “anticipate,” “intend,”
“target,” “estimate,” “continue,” “positions,” “plan,” “predict,”
“project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,”
“possible” or “potential,” by future conditional verbs such as “assume,”
“will,” “would,” “should,” “could” or “may”, or by variations of such
words or by similar expressions. These forward-looking statements are
subject to numerous assumptions, risks and uncertainties, which change
over time. Forward-looking statements speak only as of the date they are
made and we assume no duty to update forward-looking statements. Actual
results may differ materially from current projections.
In addition to factors previously disclosed in Fifth Third Bancorp’s and
MB Financial, Inc.’s reports filed with or furnished to the SEC and
those identified elsewhere in this communication, the following factors,
among others, could cause actual results to differ materially from
forward-looking statements or historical performance: the ability to
obtain regulatory approvals and meet other closing conditions to the
merger, including approval of the merger by MB Financial, Inc.’s
stockholders on the expected terms and schedule, including the risk that
regulatory approvals required for the merger are not obtained or are
obtained subject to conditions that are not anticipated; delay in
closing the merger; difficulties and delays in integrating the
businesses of MB Financial, Inc. or fully realizing cost savings and
other benefits; business disruption following the merger; changes in
asset quality and credit risk; the inability to sustain revenue and
earnings growth; changes in interest rates and capital markets;
inflation; customer acceptance of Fifth Third Bancorp’s products and
services; customer borrowing, repayment, investment and deposit
practices; customer disintermediation; the introduction, withdrawal,
success and timing of business initiatives; competitive conditions; the
inability to realize cost savings or revenues or to implement
integration plans and other consequences associated with mergers,
acquisitions and divestitures; economic conditions; and the impact,
extent and timing of technological changes, capital management
activities, and other actions of the Federal Reserve Board and
legislative and regulatory actions and reforms. Annualized, pro forma,
projected and estimated numbers are used for illustrative purpose only,
are not forecasts and may not reflect actual results.
Fifth Third Bancorp
Sameer Gokhale (Investors)
513-534-2219
or
Larry Magnesen (Media)
513-534-8055