Please ensure Javascript is enabled for purposes of website accessibility

Instant Analysis: Old National Bank Scoops Up a Smaller Lender

By Eric Volkman - Jan 15, 2016 at 3:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Midwestern regional banking group will pay around $461 million in cash and stock for Anchor BanCorp.

What happened?
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.

Eric Volkman has no position in any stocks mentioned. Nor does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Old National Bancorp Stock Quote
Old National Bancorp
ONB
$17.91 (1.30%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.