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Wintrust Financial (WTFC) Intends to Buy Oak Bank for $46M

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In a bid to expand its market presence, Wintrust Financial Corporation (WTFC - Free Report) recently entered into an agreement to buy Rush-Oak Corporation (ROC) — the parent company of Oak Bank — for an estimated purchase price of $46 million. The deal, which is expected to close in second-quarter 2019, is subject to approval of shareholders of ROC, banking regulators and certain other closing conditions.

Edward J. Wehmer, president and CEO of Wintrust, noted, “This transaction is a great opportunity to expand our market presence in the heart of the City of Chicago. Oak Bank has a wonderful reputation for providing outstanding customer service using a community banking approach.  We look forward to continuing that tradition and to providing its customers with an expanded array of products, services and resources.”

Per the agreement, the aggregate purchase price will be paid in cash. Further, the merger agreement states that prior to the deal’s closure, the shares directly held by individual minority shareholders of Oak Bank will be redeemed for cash by ROC. The total redemption value will be approximately $9 million. Following this, Oak Bank will become a wholly owned subsidiary of ROC. Oak Bank had roughly $196 million in assets, $143 million in loans and $158 million in deposits as of Dec 31, 2018.

Wintrust anticipates that the deal will not have any material effect on its current-year earnings.

Wintrust has been expanding inorganically since 2003. In 2018, the company completed the buyouts of American Enterprise Bank and Chicago Shore Corporation. Prior to this, it had acquired First Community Financial Corporation and Generations Bancorp, Inc. in 2016.

Shares of Wintrust have lost 17.4% over the past six months compared with the 11.5% decline registered by the industry.


Currently, Wintrust carries a Zacks Rank #3 (Hold).

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