Evansville-based Old National Bancorp (Nasdaq: ONB) is expanding into Wisconsin with the acquisition of the third-largest bank headquartered in that state. Old National says the approximately $460 million transaction for Anchor BanCorp Wisconsin Inc. (Nasdaq: ABCW) is the largest deal in its history. Old National Chief Executive Officer Bob Jones says the deal ends a brief "pause" to a streak of mergers and acquisitions the company had initiated over the last two and-a-half years.
The the cash and stock deal involves nearly four dozen banking centers throughout Wisconsin. Jones says it is a 60 percent/40 percent stock/cash transaction, which could translate in a more than 30 percent cost savings for the resulting business. As of September, Old National had 160 banking branches and around $1.9 billion in assets.
During a conference call with investors this morning, Jones said he believes the acquisition will boost Old National’s small business, capital, residential and agricultural lending services.
Anchor has $2.2 billion in total assets, $1.5 billion in total loans, $1.8 billion in deposits and $360 million in common shareholders’ equity and was founded in 1919. Its largest presence is in the the Madison, Milwaukee and Fox Valley "triangle."
It continues a stretch of growth for Old National into "demographically attractive and economically vibrant markets." Within the last two years, Old National also added LSB Financial Corp. in Lafayette, Michigan-based United Bancorp Inc. and Tower Financial Corp. in Fort Wayne. Old National says the latest transaction will position Old National as the seventh-largest deposit holder in the state of Wisconsin.
Jones says "this partnership, which marks Old National’s entry into the great state of Wisconsin, is a natural extension of our franchise and our growth strategy. Not only does it position Old National in strong, vibrant markets with proven growth potential, it also represents an exceptional cultural fit and an opportunity to continue the strong legacy of service that distinguishes AnchorBank."
Old National currently has a presence in Indiana, Kentucky and Michigan. The deal is expected to close in the second quarter.
Old National Chief Executive Officer Bob Jones calls the combination compelling and says it will put the company in the middle of a “phenomenally good market.”