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Regions Financial (RF) Wraps Up Acquisition of Clearsight

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Regions Financial Corp. (RF - Free Report) completed the buyout of Clearsight Advisors, Inc. announced last month. The acquisition that was formally closed on Dec 31, 2021, expands Regions Financial’s mergers-and-acquisitions (M&A) advisory capabilities in the technology industry.

Clearsight is a preeminent M&A firm offering financial advisory and consulting services to clients in the technology, professional services, data and information services, and digital and technology-enabled service industries.

Per management, “In addition to complementing and enhancing the advisory services delivered by Regions Capital Markets, Clearsight is a tremendous cultural fit for Regions. We share Clearsight’s innovative, client-driven focus on meeting complex financial needs through deep market knowledge, strong collaboration with our business partners, and a clear emphasis on providing an optimal client experience.”

Clearsight will be consolidated into Regions Bank’s expanding Capital Markets division. Regions Financial will retain Clearsight’s headquarters in McLean, and business offices in New York City and Dallas.

The acquisition marks an additional avenue for the bank to broaden its specialty capabilities as well as M&A advisory services for existing technology sector clients. Moreover, it will equip Regions Financial to attract clients seeking to leverage the company’s experience and resources, and help them attain their financial goals.

Notably, management remarked that several of the company’s clients have inquired about additional solutions available through Regions Capital Markets. Hence, the buyout enhances Regions Financial’s ability to expand its preeminent position in advising high-growth companies.

The buyout underlines Regions Financial’s efforts to diversify its revenue source by offering more high-value, fee-based financial services and originations. The move is in line with the company’s efforts to expand its business operations on the back of investments in varied product offerings and inorganic activities.

Mirroring this, Regions Financial closed the acquisition of Sabal Capital earlier last month to improve agency multi-family and non-agency lending capabilities. Sabal has been integrated into Regions Financial’s Real Estate Capital Markets platform. In October, the company completed the previously announced deal to acquire the specialized home improvement lender, EnerBank USA, from its parent, CMS Energy Corporation. The move expanded its home-lending products, adding $3.1 billion in loans to consumers.

As the bank continues to explore opportunities for bolt-on acquisitions, expand its services and enhance client experiences, we believe that such endeavors will diversify its revenue streams and support long-term growth prospects.

Over the past six months, shares of Regions Financial have gained 20.9% compared with 13.7% growth of the industry.

 

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

Inorganic Growth Efforts by Other Firms

Several companies from the finance sector are undertaking consolidation efforts to improve competencies in a bid to counter the low-interest-rate environment.

In a similar move to enhance M&A advisory service competencies in the digital-infrastructure sector, Citizens Financial Group, Inc. (CFG - Free Report) announced a definitive agreement to acquire substantially all assets of DH Capital LLC. DH Capital is a New York-based private investment banking firm catering to companies in the Internet infrastructure, software and next-generation IT services, and communications sectors.

The move marks Citizens Financial’s third acquisition over the past four months to augment its corporate advisory team. In September, CFG closed the buyout of Willamette Management Associates and it acquired JMP Group in November.

Velocity Financial, Inc. (VEL - Free Report) acquired the majority stake in Century Health & Housing Capital. Century is a licensed “Ginnie Mae” issuer and servicer. Century offers government-insured Federal Housing Administration (FHA) mortgage financing for multi-family housing, senior housing and long-term care/assisted living facilities.

The acquisition will help Velocity Financial leverage Century’s well-established platform and diversify Velocity Financial’s revenues with the addition of fee-based origination and servicing income. The buyout adds new products. This along with Velocity Financial’s national origination footprint offers ample development scope for origination growth and the expansion of commercial mortgage product offerings.

RBB Bancorp (RBB - Free Report) entered a definitive agreement to buy Gateway Bank in a cash transaction valued at $22.9 million in a bid to penetrate the strategic San Francisco Bay Area. The buyout will expand RBB Bancorp’s physical presence in six of nine target markets of Gateway Bank and provide a profitable base to extend the advancement the latter has made in the Bay Area. It is also in line with RBB Bancorp’s aim to establish its relationship-based banking model in the region for the community.

As of Sep 30, 2021, Gateway Bank had total assets of $172.4 million, total gross loans of $123.1 million, total deposits of $147.5 million and total tangible equity of $15.5 million. Hence, the acquisition is likely to enhance RBB Bancorp’s balance sheet.