In a significant move within the financial services sector, First Financial Bancorp, an Ohio-based financial institution, has entered into a definitive agreement to acquire BankFinancial Corporation, a Maryland-based bank holding company. This all-stock merger, valued at approximately $141.3 million, is set to reshape the landscape for both companies.
**Transaction Overview**
The merger agreement, signed on August 11, 2025, stipulates that BankFinancial will merge with and into First Financial, with First Financial designated as the surviving corporation. This will be followed by the merger of BankFinancial, National Association (a subsidiary of BankFinancial), with First Financial Bank, a wholly-owned subsidiary of First Financial. The expected exchange ratio is 0.480 shares of First Financial common stock for each share of BankFinancial common stock owned. Based on First Financial's closing stock price of $11.34 on August 11, 2025, this translates to a merger consideration value of approximately $141.3 million in total.
**Strategic Rationale**
The acquisition is expected to enhance First Financial’s market presence and operational efficiency, providing a more diversified portfolio of financial products and services. The merger also aims to leverage BankFinancial's existing customer base and branch network, allowing for economies of scale and improved profitability. First Financial anticipates that the merger will qualify as a reorganization for U.S. federal income tax purposes, enabling shareholders to exchange their shares without immediate tax implications, except for cash received in lieu of fractional shares.
**Timeline and Next Steps**
The merger is subject to approval by BankFinancial’s shareholders, with a special meeting scheduled for December 18, 2025, at the Hilton Chicago/Oak Brook Hills Resort. The board of directors of BankFinancial unanimously recommends that stockholders vote in favor of the merger proposal. Following shareholder approval, the companies expect to finalize the transaction promptly.
**Market Impact**
For shareholders, the merger presents an opportunity for BankFinancial stockholders to gain equity in a larger and potentially more stable institution. Post-merger, First Financial shareholders are projected to own approximately 94% of the combined entity, while former BankFinancial stockholders will hold about 6% of First Financial’s common shares. This consolidation could have broader implications for the market, potentially leading to increased competition in the regional banking sector.
**Regulatory Considerations**
The transaction will require customary regulatory approvals, which may include antitrust reviews, depending on the market impact of the merger. Both companies are committed to fulfilling all regulatory requirements to ensure a smooth transition.
As the merger progresses, both First Financial and BankFinancial will provide updates to their respective shareholders, emphasizing transparency and investor engagement throughout the process.