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Associated Banc-Corp Diversifies Operations, to Buy Whitnell

Zacks

Associated Banc-Corp ASB signed a definitive agreement to acquire Oak Brook, IL-based Whitnell & Co., a wealth management and multi-family office services company. The deal will likely enhance shareholder value through business diversification.

Details

The financial terms of the deal, expected to close in a month’s time, were not disclosed. It will further strengthen Associated Banc-Corp’s tax, charitable and estate planning services, mainly for families.

Philip B. Flynn, the President and CEO of Associated Banc-Corp said, “The addition of this respected company adds a strong team to our Chicago-area private client group and positions us to offer unique investment, asset management and related services to high net worth clients across our markets.”

Whitnell, with nearly 25 employees, has roughly $1 billion in assets under management (AUM). Upon completion of the deal, it will be integrated as a subsidiary of Associated Banc-Corp but will retain its brand name, offices and employees. Further, the current President and CEO, William Thonn will continue in his present role.

Accretive to 2018 Earnings

Apart from boasting Associated Banc-Corp’s existing businesses, the transaction is projected to increase its AUM and run-rate revenues by approximately 10%. Though the deal will have no material impact on this year’s earnings, it will be accretive to the company’s 2018 earnings.

More Deals to Follow?

With more opportunities available for consolidation within the banking industry, Associated Banc-Corp seems to be on the right path. The company had announced a deal to acquire Wisconsin based-Bank Mutual Corporation BKMU for $482 million in July. This transaction is anticipated to close early next year.

With a strong liquidity position and stable balance sheet, Associated Banc-Corp is expected to continue with inorganic growth strategy in the coming days as well.

Following the announcement of the deal, shares of Associated Banc-Corp increased nearly 1.4%. Over the past year, the stock has rallied 8.3%, underperforming the industry’s gain of 11.5%. Nonetheless, we believe the price performance will likely improve in the coming days, given the company’s fundamental strengths and synergies from the deals.



Currently, Associated Banc-Corp carries a Zacks Rank #3 (Hold).

Stocks Worth a Look

A couple of stocks in the same industry worth considering are Commerce Bancshares, Inc. CBSH and Old Second Bancorp, Inc. OSBC. Both these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Commerce Bancshares’ Zacks Consensus Estimate for current-year earnings was revised 1.4% upward, over the past 60 days. Also, its share price has jumped 6.5% over the past year.

Old Second Bancorp’s earnings estimates for 2017 were revised 2.9% upward, over the last 60 days. Further in the past year, its shares have jumped 32.8%.

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