EXHIBIT 99.1
NYSE: OK
NASDAQ: PINN
FOR RELEASE: IMMEDIATE
DATE: MARCH 19, 1999
CONTACTS: OLD KENT FINANCIAL CORPORATION
INVESTOR: ALBERT T. POTAS (616) 771-1931
MEDIA: TANYA BERG (616) 771-4364
PINNACLE BANC GROUP, INC.
JOHN J. GLEASON, JR. (630) 574-3550
OLD KENT TO ACQUIRE PINNACLE BANC GROUP
-OLD KENT'S ILLINOIS PRESENCE TO GROW TO $4 BILLION IN DEPOSITS-
-OLD KENT WILL RANK 5TH IN DEPOSIT MARKET SHARE IN THE GREATER-
CHICAGO AREA
Grand Rapids, Michigan - David J. Wagner, Chairman, President and CEO
of Old Kent Financial Corporation, and John J. Gleason, Jr., Vice Chairman
and CEO of Pinnacle Banc Group, Inc., announced today that they have signed
a definitive agreement for the merger of Pinnacle Banc Group into Old Kent.
Pinnacle Banc Group, Inc. is a bank holding company headquartered in
the Chicago suburb of Oak Brook, Illinois, with assets of $1.1 billion and
deposits of $0.9 billion at December 31, 1998. Pinnacle's banking
subsidiaries operate from 16 locations with 13 branches in the Chicago
metropolitan area. These are located in Cicero, Chicago, Oak Park, Harvey,
Berwyn, North Riverside, LaGrange Park, Westmont, Niles, Batavia, Elburn
and Warrenville. Pinnacle also has 3 locations in the Quad-Cities area of
western Illinois.
Mr. Wagner stated, "We've always held Pinnacle Banc Group in high
regard and are very pleased by this affiliation. The Gleason family's
leadership has been a very positive influence in that organization as well
as the communities they've served for many years."
Mr. Wagner continued, "Pinnacle Banc Group will further expand and
strengthen our Chicago area franchise, moving Old Kent to 5th in deposit
share in that market. Pinnacle's locations will complement our existing
Chicago area presence and enable us to market Old Kent's broad array of
retail and commercial financial products and services to new customers in
these attractive Illinois communities."
Mr. Gleason said, "Old Kent has become a high performance financial
services competitor in the Chicago area market. We view this transaction
as beneficial to Pinnacle Banc Group's shareholders and customers. Old
Kent will bring in expanded value-added financial services, which we
believe is in the best interests of our customers."
- more -
The merger is subject to the customary approvals by Pinnacle Banc Group
shareholders and by the regulatory authorities. This transaction, along
with Old Kent's currently pending acquisition of CFSB Bancorp, a $900
million organization based in Lansing, Michigan, is expected to be
completed during the third quarter of 1999. Old Kent's management believes
that both of these acquisitions will be accretive to earnings in the year
2000 without factoring in anticipated revenue enhancements.
The merger is intended to be structured as a "pooling-of-interests" for
accounting purposes and as a tax free exchange of shares. Pinnacle Banc
Group, Inc. shareholders will receive 5.4 million shares of Old Kent stock,
using an exchange ratio of 0.717 for each share of Pinnacle Banc Group,
Inc. ($32.27 per share based on Old Kent's closing price on March 18,
1999). Old Kent anticipates approximately $16 million of one-time merger
related charges. Old Kent expects annual cost savings of $9 million, about
30% of Pinnacle's expense base, to result from the merger. Based on the
current market value of Old Kent stock, the total value of the transaction
would be $243 million. The combined company is expected to have a market
capitalization of $5 billion.
Mr. Gleason stated that Pinnacle Banc Group, Inc. terminated the
remainder of its 1999 stock repurchase program announced on January 20,
1999. Through March 19, 1999, Pinnacle had reacquired 60,400 shares under
that program.
Old Kent's stock repurchase program is not affected by this proposed
transaction. This program was authorized in June 1998. Through March 19,
1999, the Corporation had repurchased approximately 4.5 million shares of
Old Kent Common Stock, or 75% of the total 6 million shares authorized for
reacquisition. Under this program, shares intended for anticipated future
stock dividends are reacquired ratably on a quarterly basis. Also, shares
intended for reissue in connection with dividend reinvestment and employee
stock plans are reacquired quarterly as needed to maintain shares reserved
for those purposes at a level consistent with anticipated permissible
needs. At March 19, 1999, Old Kent had remaining authorization to
repurchase approximately 1.5 million shares of its stock over the next four
months.
Old Kent is a financial services company headquartered in Grand Rapids,
Michigan, with a 40 year history of consecutive increases in annual per
share earnings and dividends. It operates 235 banking offices in Michigan,
Illinois, and Indiana as well as over 140 mortgage lending sites throughout
the United States. At December 31, 1998, Old Kent assets totaled $16.6
billion.
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The following Summary Financial Data is part of this press release.
Summary Financial Data
OLD KENT PINNACLE
----------------- -----------------
DECEMBER 31, 1998 DECEMBER 31, 1998
----------------- -----------------
Earnings Summary:
Basic Earnings Per Share $1.86 $1.96
Diluted Earnings Per Share $1.84 $1.95
Net Income $198,798,000 $14,681,000
Balance Sheet Data (in millions):
Total Loans $ 8,884 $ 541
Total Deposits 12,940 884
Total Assets 16,589 1,146
Shareholders' Equity 1,135 117
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FORWARD LOOKING STATEMENTS
This news release contains certain estimates and projections for Old Kent
Financial Corporation, Pinnacle Banc Group, Inc. and the combined company
following the merger, including estimates and projections related to cost
savings, revenue enhancements and accretion that may be realized from the
merger, and certain merger-related charges expected to be incurred in
connection with the transaction. These estimates and projections
constitute forward-looking statements which involve significant risks and
uncertainties. Actual results may differ materially from the results
discussed in these forward-looking statements. Internal and external
factors that might cause such a difference include, but are not limited to:
(1) expected cost savings from the merger might not be fully realized or
realized within the expected time frame; (2) revenues following the merger
may be lower than expected; (3) competitive pressures among depository
institutions may increase significantly; (4) costs or difficulties related
to the integration of the business may be encountered; (5) changes in the
interest rate environment may reduce net interest income; (6) general
economic conditions may deteriorate, either nationally or in the states in
which the combined company will be doing business; and (7) legislation or
regulatory changes may adversely affect the businesses in which the
combined company would be engaged.