Indiana-based lender Old National Bank (ONB 1.30%) is crossing a state border to make an acquisition. The company announced it has signed a definitive agreement to buy Anchor BanCorp Wisconsin (NASDAQ: ABCW) in a mix of cash and stock worth roughly $461 million. Under the terms of the deal, Anchor BanCorp stockholders can choose to receive slightly more than 3.5 shares or $48.50 in cash for each share they possess. The purchase has been approved by the boards of directors of both companies; it remains subject to approval from Anchor BanCorp shareholders and the relevant regulatory authorities. Old National Bank said it expects the transaction to close in Q2 of this year.
Does it matter?
Old National Bank is expanding its footprint nicely with this acquisition. Currently operating in Kentucky, Michigan, and its home state of Indiana, the company will gain an instant presence in neighboring Wisconsin with the Anchor BanCorp buy. According to Old National Bank, this will make it the seventh-largest deposit holder in the state.
All told, Anchor BanCorp holds around $1.8 billion in deposits and $2.2 billion in total assets. That'll add plenty of bulk to Old National Bank's balance sheet, which, at the end of its most recently reported quarter, showed nearly $8.6 billion in deposits and almost $12 billion in total assets.
Old National Bank is fond of growing through acquisitions; its list of buys is long and reaches back decades. This strategy seems to be working well for the lender, as its key metrics -- net income, loans, and assets -- have all risen substantially over the past five years. It's clearly a bank that knows how to integrate new businesses successfully, and there's little reason to think that the Anchor BanCorp absorption will be any different.