EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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FOR: MAF Bancorp, Inc. Westco Bancorp, Inc.
55th Street & Holmes Avenue 2121 S. Mannheim Road
Clarendon Hills, IL 60514 Westchester, IL 60154
CONTACTS: Allen H. Koranda, Chairman David C. Burba, Chairman
and Chief Executive Officer and President
Jerry A. Weberling, EVP and Richard A. Brechlin, EVP and
Chief Financial Officer Treasurer
(630) 887-5999 (708) 865-1100
Michael Janssen, SVP
(630) 986-7544
MAF BANCORP, INC. TO ACQUIRE WESTCO BANCORP, INC.
Clarendon Hills, Illinois, August 17, 1998 - MAF Bancorp, Inc. (NASDAQ:MAFB),
has agreed to acquire Westco Bancorp, Inc. in an all-stock transaction valued at
$84.3 million. In a joint release today, Allen Koranda, Chairman of the Board of
MAF Bancorp, Inc. and David Burba, Chairman of the Board of Westco Bancorp, Inc.
announced that their respective boards of directors have approved a definitive
agreement under which Westco will merge with MAF. The merger agreement provides
for a fixed exchange ratio pursuant to which each share of Westco common stock
will be exchanged for 1.395 shares of MAF common stock. Based on the closing
price of MAF common stock of $22.125 on August 14, 1998, the transaction has a
current value of $30.86 per Westco share.
Concurrent with the execution of the definitive agreement, Westco has granted
MAF an option to purchase an amount of shares equal to 19.9% of its outstanding
common stock, giving effect to the option, which option is exercisable in
certain circumstances. The transaction will be accounted for as a pooling of
interests for financial accounting purposes and treated as a tax-free
reorganization. The transaction, which is subject to regulatory approval and the
approval of Westco shareholders, is currently expected to close in December 1998
or January 1999. In connection with the merger, Westco's bank subsidiary, First
Federal Savings and Loan Association of Westchester, will be merged with Mid
America Bank, a subsidiary of MAF.
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Allen Koranda, Chairman and Chief Executive Officer of MAF Bancorp, said, "This
is an excellent in-market acquisition for MAF. It allows us to enhance our
market share in western Cook County with a transaction that is consistent with
our financial goals. With combined deposits of $365 million in the
Westchester-LaGrange Park area, we will be the market share leader. It also
improves our overall strong market share position in western Cook and DuPage
Counties."
David Burba, Chairman of Westco, said, "We are excited about the opportunity to
partner with MAF, a strong community-oriented bank which has a proven track
record of delivering superior returns to shareholders. We believe the
transaction will benefit customers through the offering of additional products
and services, while providing employees with the opportunity to join a growing
organization. Shareholders of Westco have enjoyed an excellent return on their
investment over the past six years. As new investors in MAF, we believe they
will continue to benefit from a company that is committed to enhancing
shareholder value." Burba will join MAF as a director and serve as an executive
vice president of MAF following the acquisition.
MAF expects to achieve significant cost savings following the integration of the
two companies' respective operations. The data processing conversion is expected
to be completed by mid-February 1999. Revenue enhancement opportunities were
identified in the areas of deposit account and brokerage services fee income,
redeployment of excess liquidity, deposit base repricing and moderate leveraging
of the increased capital base. MAF expects the transaction to result in only
nominal dilution to 1999 earnings per share and to be accretive to earnings per
share thereafter. Additionally, the transaction is expected to be accretive to
tangible book value per share, taking into account various merger-related
expenses which are currently estimated at approximately $5.0 million, on an
after-tax basis. This merger charge will be recorded in the quarter in which the
transaction closes.
MAF and Westco also announced today that each company's board of directors has
rescinded its previously announced stock repurchase program.
As of June 30, 1998, Westco Bancorp, Inc., through its wholly-owned subsidiary,
First Federal Savings and Loan Association of Westchester, had approximately
$320 million in assets, $260 million in deposits and $50 million in
stockholders' equity. Westco operates one office and a drive-up facility in
Westchester, IL. The common stock of Westco Bancorp, Inc. is traded on the
Nasdaq Stock Market under the symbol WCBI.
MAF is the parent company of Mid America Bank, a federally chartered stock
savings bank headquartered in Clarendon Hills, IL. At June 30, 1998 the company
had assets of $3.6 billion, deposits of $2.4 billion and stockholders' equity of
$280 million. The Bank operates a network of 23 retail banking offices primarily
in Chicago and its western suburbs. The Company's common stock trades on the
Nasdaq Stock Market under the symbol MAFB.
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Forward-Looking Information
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Statements contained in this news release that are not historical facts may
constitute forward-looking statements (within the meaning of Section 21E of the
Securities Exchange Act of 1934) which involve significant risks and
uncertainties. Actual results may differ materially from the results discussed
in these forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) inability to realize cost savings from the
merger to the full extent expected or within the expected time frame; (2) lower
than expected revenues following the merger; (3) significant increases in
competitive pressures among depository institutions; (4) higher than expected
costs or difficulties related to the integration of the business of Westco; (5)
changes in the interest rate environment that result in reduced interest rate
margins; (6) deterioration of general economic conditions, either nationally or
in the Company's market area; and (7) adoption of legislation or regulatory
changes that adversely affect the business of the combined company.
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