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Wintrust Financial Acquires $554M Loans from GE Capital

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Wintrust Financial Corporation (WTFC - Free Report) closed a deal to acquire select loans and related relationships from GE Capital Franchise Finance, a subsidiary of General Electric Company (GE - Free Report) . The deal, announced in Jun, 2016, was executed through its subsidiary Lake Forest Bank and Trust Company.

This loan consists of GE Capital’s restaurant franchise finance business, mainly quick service restaurant concepts in the Midwest and in the Western region of the U.S.

Deal Details

Loans worth $554 million were acquired by Wintrust Financial. Notably, the loan value is lower than the previously announced $581 million due to amortization and additional principal payments pertaining to normal business activity.

Wintrust Financial is strategically growing its Franchise finance team to expand commitment and reach within the franchise industry.

Edward J. Wehmer, President and CEO of Wintrust stated, “We are pleased to close this transaction to add not only the loans, but to add a large number of meaningful relationships to our existing franchise finance business. This is a business we know well and we look forward to growing these relationships.”

Road Ahead

The deal is in line with Wintrust Financial’s strategic expansion of its franchise finance business. Further, the transaction is expected to be slightly accretive to the company’s 2016 earnings per share and accretive in 2017.

In Jul, 2016 Wintrust Financial announced the deal to acquire First Community Financial Corporation for $30.3 million. Earlier in March, the company completed the acquisition of Wisconsin-based Generations Bancorp, Inc. for $25.1 million. Further in 2015, the company acquired four more entities.

For GE Capital Franchise Finance, a leading lender for the U.S. franchise finance market with more than 30 years of experience, the deal is in sync with its long-term plans. In Apr 2015, GE had announced its plan to focus on its core industrial businesses and divest its franchise finance. Apart from Wintrust Financial, GE entered into separate transactions with First Horizon National Corp. (FHN - Free Report) and Sterling National Bank to sell most of its U.S. restaurant franchise financing loans.

Currently, Wintrust Financial carries a Zacks Rank #2 (Buy). Another favorably ranked bank is Comerica Incorporated (CMA - Free Report) , sporting a Zacks rank #1(Strong Buy).

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