Regions Financial (RF) Agrees To Acquire Ascentium Capital

Regions Financial Corporation’s (NYSE:RF) subsidiary, Regions Bank has agreed to acquire equipment finance lender, Ascentium Capital LLC, from Warburg Pincus. Closing of the deal, expected in second-quarter 2020, is subject to the satisfaction of customary closing conditions.

While the financial terms of the transaction have not been disclosed yet, the acquisition of Ascentium Capital is expected to expand Regions Financial’s offerings for small business customers. It also complements Regions Financial’s established equipment finance and commercial banking businesses that serve the middle market and large companies.

Headquartered in Kingwood, Texas, Ascentium Capital is the largest independent equipment finance lender in the United States. It offers comprehensive financing solutions through more than 460 employees. It had approximately $2 billion in loans and leases, and $1.5 billion in originations at the end of 2019.

Since inception, Ascentium Capital, with its management team and proprietary underwriting technology platform, has delivered strong performance throughout credit cycles.

Ronnie Smith, senior executive vice president and head of the Regions Corporate Banking Group, stated, “Ascentium Capital’s experienced management team has built a strong company known for providing America’s small businesses access to the capital they need to grow, and we are excited to welcome them to Regions.”

Ascentium Capital’s CEO, Tom Depping, said, “We are pleased to join Regions, a firm known for its commitment to the customer experience and a long history of providing comprehensive banking solutions to companies of all sizes. This combination will enable us to expand our reach and relevance in serving our vendors and small business customers while continuing to provide seamless service.”

Notably, in order to boost its diversified business, Regions Financial has been on an acquisition spree over the past few years. As the company remains committed toward diversifying its revenue streams, we believe such acquisitions support its growth prospects.

Moreover, it continues to take actions with respect to its Simplify and Grow initiative, including streamlining its structure and refining its branch network, while making investments in new technologies, delivery channels and other growth drivers.

In the past year, shares of Regions Financial have lost 15% compared with 9.8% decline of the industry it belongs to.

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

A few better-ranked stocks from the finance space are mentioned below.

Cohen & Steers Inc.’s (NYSE:CNS) Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6% over the past 60 days. Moreover, the stock has rallied 19.3% in the past six months. It currently sports a Zacks Rank #1 (Strong Buy).

Legg Mason, Inc. (NYSE:LM) has witnessed upward earnings estimate revision of 2.7% for the current fiscal year over the past 60 days. The company’s shares have gained 36.9% in the past six months. At present, the stock flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for earnings of Artisan Partners Asset Management Inc. (NYSE:APAM) has been revised 6.7% upward for the current year over the past 60 days. The stock has gained 9.2% over the past six months. Currently, it also sports a Zacks Rank #1.

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