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Webster's (WBS) interLINK Buyout to Improve Funding Ability
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Continuing with its inorganic growth moves, Webster Financial Corporation (WBS - Free Report) recently announced that its principal bank subsidiary Webster Bank, N.A. has signed a definitive agreement to acquire StoneCastle Insured Sweep, LLC. StoneCastle Insured Sweep does business as interLINK and is a subsidiary of StoneCastle Partners, LLC.
The financial terms of the deal were kept under wraps. The deal is expected to close in first-quarter 2023.
Markedly, interLINK is a technology-enabled deposit-management platform overseeing more than $9 billion of deposits from FDIC-insured cash sweep programs between banks and broker/dealers and clearing firms.
The acquisition of the software platform offers access to core deposit funding and is in line with WBS’ efforts to diversify funding capabilities and add another technology-enabled platform to its system. Webster Financial’s existing deposit-gathering capabilities are well-differentiated and include Commercial and Consumer Banking Businesses, HSA Bank and BrioDirect.
Per the agreement, post-acquisition, interLINK will continue to operate and serve its broker/dealer and clearing firm clients as it does today. The platform’s highly-scalable technology likely enables it to generate notable liquidity at minimal operating cost.
Per management, “interLINK is a unique deposit channel that provides a scalable source of liquidity for the company."
Notably, of late, WBS has been making efforts to strengthen operations on the back of acquisitions. In November 2022, the HSA Bank operating segment acquired around 4,800 health savings accounts (HSA), with $15.5 million in deposits from Inland Bank and Trust.
In February 2022, Webster Financial completed its merger with Bend Financial, which accelerates digital transformation for HSA Bank. In January, it acquired Sterling Bancorp in an all-stock deal valued at $5.2 billion, making WBS one of the largest commercial banks in the Northeast United States. The combined company enjoys loan growth and a best-in-class deposit franchise.
Washington Federal, Inc. (WAFD - Free Report) announced its plan to enter the lucrative and “fast-growing” California market. The company signed an agreement to acquire Luther Burbank Corporation and its wholly-owned subsidiary, Luther Burbank Savings, for $654 million.
Washington Federal is expected to use the deal as “a platform for growth in attractive California markets.” The company intends to enhance multi-family loan origination capabilities and expand commercial banking activities to Northern and Southern California. At present, LBC operates in California, Washington and Oregon through 11 full-service branches and seven loan production offices.
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Webster's (WBS) interLINK Buyout to Improve Funding Ability
Continuing with its inorganic growth moves, Webster Financial Corporation (WBS - Free Report) recently announced that its principal bank subsidiary Webster Bank, N.A. has signed a definitive agreement to acquire StoneCastle Insured Sweep, LLC. StoneCastle Insured Sweep does business as interLINK and is a subsidiary of StoneCastle Partners, LLC.
The financial terms of the deal were kept under wraps. The deal is expected to close in first-quarter 2023.
Markedly, interLINK is a technology-enabled deposit-management platform overseeing more than $9 billion of deposits from FDIC-insured cash sweep programs between banks and broker/dealers and clearing firms.
The acquisition of the software platform offers access to core deposit funding and is in line with WBS’ efforts to diversify funding capabilities and add another technology-enabled platform to its system. Webster Financial’s existing deposit-gathering capabilities are well-differentiated and include Commercial and Consumer Banking Businesses, HSA Bank and BrioDirect.
Per the agreement, post-acquisition, interLINK will continue to operate and serve its broker/dealer and clearing firm clients as it does today. The platform’s highly-scalable technology likely enables it to generate notable liquidity at minimal operating cost.
Per management, “interLINK is a unique deposit channel that provides a scalable source of liquidity for the company."
Notably, of late, WBS has been making efforts to strengthen operations on the back of acquisitions. In November 2022, the HSA Bank operating segment acquired around 4,800 health savings accounts (HSA), with $15.5 million in deposits from Inland Bank and Trust.
In February 2022, Webster Financial completed its merger with Bend Financial, which accelerates digital transformation for HSA Bank. In January, it acquired Sterling Bancorp in an all-stock deal valued at $5.2 billion, making WBS one of the largest commercial banks in the Northeast United States. The combined company enjoys loan growth and a best-in-class deposit franchise.
Shares of this Zacks Rank #2 (Buy) company have gained 7.8% over the past three months compared with the industry’s growth of 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Inorganic Growth Efforts by Other Firms
Washington Federal, Inc. (WAFD - Free Report) announced its plan to enter the lucrative and “fast-growing” California market. The company signed an agreement to acquire Luther Burbank Corporation and its wholly-owned subsidiary, Luther Burbank Savings, for $654 million.
Washington Federal is expected to use the deal as “a platform for growth in attractive California markets.” The company intends to enhance multi-family loan origination capabilities and expand commercial banking activities to Northern and Southern California. At present, LBC operates in California, Washington and Oregon through 11 full-service branches and seven loan production offices.