Markets

Popular Closes Sale of 12 Illinois Branches to First Midwest - Analyst Blog

A generic image of a pen next to a pile of coins
Credit: Shutterstock photo

Popular, Inc. ( BPOP ) announced completion of the sale of its regional business in Illinois to First Midwest Bank, the wholly-owned subsidiary of First Midwest Bancorp Inc. ( FMBI ). The sale was carried out by Popular Community Bank, the U.S. banking subsidiary of Popular.

As per the deal, Popular sold 12 retail branches along with its small business and middle market commercial lending activities in Chicago. The transaction comprised $562 million in loans as well as $726 million in deposits that the branches had as of Jul 31, 2014.

Moreover, the deal resulted in a net premium of around $18.4 million, before taking into account the customary transaction related costs. This sale comes as part of the strategic reorganization announced by Popular earlier this year.

According to Popular, it has entered into definitive agreements to divest its 41 regional branches including approximately $1.8 billion in loan and $2.1 billion in deposits in California, Illinois and Central Florida to three distinct buyers. The other two sale transactions are expected to be concluded by the end of this year.

Popular has undertaken this divestiture initiative to concentrate solely on the central markets of New York and South Florida. Moreover, the company looks forward to enhance business activities and optimize invested capital by streamlining its operations.

On the other hand, this acquisition will further expand First Midwest's footprint in Chicago and enable it to offer extended products and services to its existing customers.

The financial advisor to Popular was RBC Capital Markets, LLC and its legal counsels were Sullivan & Cromwell LLP and Chuhak & Tecson, P.C.

Currently, Popular carries a Zacks Rank #2 (Buy). Some better-ranked banks include Farmers Capital Bank Corp. ( FFKT ) and Bank of the Ozarks, Inc. ( OZRK ). Both these stocks hold a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

POPULAR INC (BPOP): Free Stock Analysis Report

FIRST MIDWST BK (FMBI): Free Stock Analysis Report

BANK OZARKS (OZRK): Free Stock Analysis Report

FARMERS CAP KY (FFKT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

FMBI BPOP

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More