BOK Financial Corporation
) recently completed the acquisition of Denver-based The Milestone
Group Inc., a wealth management firm. Financial terms of the deal
were not disclosed.
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The acquisition by BOK Financial demonstrates its aim of
diversifying its revenue opportunities by increasing its fee-based
business. Previously, the company also purchased United Banks of
Colorado in 2007 and Colorado State Bank and Trust in 2003.
Frederic Dorwart, Lawyers acted as the legal counsel to BOK
Financial, while Sherman and Howard L.L.C. was delegated as legal
advisors to The Milestone Group. Moreover, FBR Capital Markets, a
FBR & Co.
), provided financial advice to the Milestone Group.
The Milestone Group, which provides wealth management services to
about 250 high net worth clients, was founded in 1996 and is
established mainly in Colorado and Nebraska. Moreover, the firm has
about $1.3 billion in equity and fixed income investments.
Having strengthened its foothold over the years through its local
bank brand, Colorado State Bank and Trust, BOK Financial has a
robust presence in Denver. Therefore, with the acquisition of
Milestone Group, the company will expand further in Denver with the
help of the acquired firm's wealth management brand and
proficiency. Furthermore, assets under management and
administration for BOK Financial will sum up to about $50 billion.
The deal widens The Milestone Group's scope and will help its
expansion efforts with the commitment of providing investment
decisions to its clients. Moreover, there will be no change in the
company's founders, advisors and relationship teams.
Overall, the clients of Milestone Group will have access to the
additional services and products provided by Colorado State Bank
and Trust, while BOK Financial will take advantage of Milestone
Group's investment management potencies.
Recently, the long-term Issuer Default Ratings (IDR) of BOK
Financial and its lead bank subsidiary, BOKF, NA, have been
upwardly revised to 'A' from 'A-' by Fitch Ratings. The outlook
assigned is Stable.
A diverse earnings base, solid capital position and healthy liquid
profile are the positives behind the ratings upgrade of BOK
Financial. According to Fitch, BOK Financial's solid fundamentals
are a consequence of its ownership as well as structure of
The rating upgrades and acquisitions of such asset management
companies are welcome as they play a major role in preserving
investor confidence in the stock.
We also believe that BOK Financial's diverse revenue stream, sturdy
capital position and expense control initiatives bode well for
investors. Capital deployment efforts also bode well and boost
investors' confidence. Nevertheless, a protracted economic recovery
and its exposure to the energy sector and risky assets remain our
BOK Financial currently retains its Zacks #2 Rank, which translates
into a short-term Buy rating. However, considering the
fundamentals, we maintain our long-term 'Neutral' recommendation on