Wintrust Financial (WTFC) Concludes Rush-Oak Acquisition

Wintrust Financial Corporation WTFC has completed the acquisition of Rush-Oak Corporation — the parent company of Oak Bank — at a purchase price of about $46 million. The deal was announced in February 2019.

With this buyout, Wintrust has added nearly $201 million in assets, approximately $141 million in loans and approximately $163 million in deposits (the figures are as of March 2019). Also, it was successful in expanding presence in the city of Chicago.

Per the terms agreed, prior to the deal closure, shares directly held by individual minority shareholders of Oak Bank were redeemed for cash by Rush-Oak. The total redemption value being approximately $8.7 million.

Wintrust does not anticipate the deal to have any material effect on its current-year earnings.

Wintrust has been expanding inorganically since 2003. In 2018, the company completed the buyouts of American Enterprise Bank and Chicago Shore Corporation. Prior to this, it had acquired First Community Financial Corporation and Generations Bancorp, Inc. in 2016.

Acquisition Spree by Banks in 2019

First Midwest Bancorp FMBI completed the acquisition of Bridgeview Bancorp in mid-May. The stock cum cash deal was valued at nearly $145 million. With this deal, all 13 banking offices of Bridgeview Bank across greater Chicagoland were converted to First Midwest branches.

Also, in early May, Glacier Bancorp GBCI announced the completion of its acquisition of FNB Bancorp. Post-closing, First National Bank operates as a new Glacier Bank division headquartered in Utah.

In April, People's United Financial PBCT completed the buyout of Belmont-based BSB Bancorp. The all-stock deal was valued at $327 million. Notably, the deal is expected to be accretive to earnings by 3 cents, based on fully phased-in cost savings, with an IRR of more than 20% and a tangible book value earn-back within 3.1 years.

Our Viewpoint

With a strong balance sheet and liquidity position, Wintrust Financial will likely continue with its inorganic expansion efforts, which have so far resulted in improved revenues and rise in market share.

Shares of Wintrust have lost 7.2% over the past six months compared with the 8.5% decline registered by the industry.

Currently, Wintrust carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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