EXHIBIT 99.1
[AVONDALE FINANCIAL CORPORATION LOGO]
PRESS RELEASE
FOR INFORMATION AT AVONDALE CONTACT: FOR INFORMATION AT COAL CITY OR
MANUFACTURERS BANK CONTACT:
ROBERT S. ENGELMAN, JR. -- PRESIDENT & CEO
HOWARD A. JAFFE -- VICE PRESIDENT & CFO -- (312) 782-6200 MITCHELL FEIGER -- PRESIDENT -- (773) 292-6271
E-MAIL: HJAFFE@MAIL.AVONDALEFINANCIAL.COM KAREN A. PERLMAN -- DIRECTOR OF MARKETING -- (773) 292-6292
FOR IMMEDIATE RELEASE
AVONDALE FINANCIAL CORP. AND COAL CITY CORPORATION AGREE TO MERGE
AND FORM MB FINANCIAL, INC.
CHICAGO, OCTOBER 13, 1998 -- AVONDALE FINANCIAL CORP. ("AVONDALE") (NASDAQ:
AVND), the holding company for Avondale Federal Savings Bank, and COAL CITY
CORPORATION, ("Coal City") the holding company for Manufacturers Bank, today
announced they had entered into a definitive agreement in connection with a
merger of equals. The combined company will be called MB Financial, Inc. ("MB
Financial") and have assets of approximately $1.4 billion.
Under the terms of the agreement, Coal City will be merged into Avondale and the
holding company will be renamed MB Financial, Inc. (the "Merger"). Immediately
following the Merger, Avondale's five retail branches will be merged into
Manufacturers Bank. Each share of Coal City will be converted into 83.5 shares
of MB Financial while each share of Avondale will be converted into 1 share of
MB Financial. On a pro forma basis, the total number of shares outstanding will
be approximately 7.0 million shares. Shareholders of Coal City will own
approximately 58.5% of the new holding company, while stockholders of Avondale
will own approximately 41.5%.
The Board of Directors of MB Financial will consist of the directors of Avondale
and Coal City as of the merger date. Mitchell Feiger, President of Coal City,
will be named President and Chief Executive Officer of the combined company.
Robert Engelman, President and CEO of Avondale, will be named Chairman of the
Board of MB Financial. Howard Jaffe will be named Vice President and Chief
Executive Officer of MB Financial and will coordinate the transition activities.
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Avondale Financial Corp.
Coal City Corporation
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The transaction is expected to close in the first quarter of 1999 and will be
accounted for as a purchase. Consummation of the transaction is subject to
regulatory approval, and the approval of the stockholders of both Avondale and
Coal City and certain other conditions.
Mitch Feiger said, "With over $1 billion in deposits and almost $100 million
regulatory capital, the bank is perfectly positioned to exploit the middle
market banking opportunities resulting from recent industry consolidation and
the sale of so many local competitors to out-of-state megabanks."
Engleman went on to say, "We are excited about this transaction and believe it
will have very positive benefits for our shareholders. It will allow the company
to expand its revenue base, provide enhanced service levels through expanded
distribution points, and realize various costs saving associated with its larger
scale and scope."
The transaction is expected to be accretive to earnings per share in the first
full year of combined operation. While both organizations believe revenue
enhancements are readily available as Manufacturers Bank offers its commercial
and retail banking products through the Avondale branch system, no revenue
enhancements were included in the merger analysis and expected earnings
accretion projection. A restructuring charge for severance payments, facilities
writedowns and other merger-related costs is estimated to be approximately $10
million pre-tax. This charge does not include the $6.0 million pre-tax writedown
of Avondale's interest-only strips referenced in a press release issued
concurrently with this release.
Cost savings of approximately $3 million, or 11% of the combined Company's
existing retail banking and administrative expenses are anticipated. The
projected cost savings do not include branch closings or sales as the two branch
networks complement one another without overlap.
In connection with the agreement, Avondale and Coal City granted each other an
option to acquire up to 19.9% of the outstanding common stock of the other firm
upon the occurrence of certain events.
As a result of the "Purchase" accounting treatment, Avondale, which currently
has approved a 5% stock repurchase plan, expects to continue its program as
market conditions dictate.
Avondale operates five retail banking offices in the Chicago metropolitan area
through its principal subsidiary, Avondale Federal Savings Bank. At June 30,
1998, Avondale had consolidated assets of $520 million and total stockholders
equity of $43 million.
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Avondale Financial Corp.
Coal City Corporation
Page 3
Coal City is a privately held bank holding company headquartered in Chicago
whose principal subsidiary, Manufacturers Bank, operates eight banking offices
in the Chicago metropolitan area. At June 30, 1998, Coal City had consolidated
assets of $870 million and total shareholders equity of $46 million. On July 21,
1998 Coal City completed a $25 million offering of floating rate trust preferred
securities pursuant to Rule 144A.
Except for the historical information contained herein, the matters contained in
this news release and other information in Avondale's SEC filings, may express
"forward looking statements" that involve risk and uncertainties, including
statement concerning future events of performance and assumptions and other
statements that are other than statements of historical facts. Avondale cautions
readers not to place undue reliance on any forward-looking statements, which
speak as of the date made. Readers are advised that various factors, including
but not limited to, changes in laws, regulations or Generally Accepted
Accounting Principals; Avondale's and the combined company's competitive
position within its market areas; unforeseen changes in interest rates;
unforseen downturns in the local or regional or national economies. These and
other factors may cause the combined company's actual results for future periods
to differ materially from those anticipated or projected. Avondale does not
undertake, and specifically disclaims any obligation, to publicly release the
result of any revisions that may be made to any forward-looking statements to
reflect the occurrence of anticipated or unanticipated events or circumstances
after the date of such statements.
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