Wintrust Financial's Shares Up On SBC Incorporated Buyout

Shares of Wintrust Financial Corporation (NASDAQ:WTFC) have rallied 2.3%, following the closure of deal to acquire SBC Incorporated — the parent company of Countryside Bank. The stock-cum-cash deal, announced in July 2019, was valued at approximately $95.2 million.

Notably, Countryside Bank, an Illinois state-chartered bank, operates in six banking offices located in the communities of Countryside, Burbank, Darien, Homer Glen, Oak Brook and Chicago, IL. Further, it had assets of nearly $578 million, deposits of approximately $501 million and loans of $434 million as of Oct 31, 2019.

Edward J. Wehmer, president and CEO of Wintrust, noted, “This transaction further develops our market presence in the western suburbs of the Chicago metropolitan area.” He further added, “We look forward to continuing that tradition and to providing its customers with an expanded array of products, services and resources.”

Deal Details

SBC Incorporated’s each shareholder was paid through a combination of 50% cash and 50% shares of Wintrust. The price of Wintrust common stock was based on its average trading price at closing, determined according to the merger agreement.

The deal is unlikely to have a material impact on the acquiring company’s 2019 earnings per share.

Conclusion

Wintrust has been expanding inorganically since 2003 to strengthen its footprint. Earlier this year, the company completed the buyout of Rush-Oak Corporation. Prior to this, it had acquired First Chicago Shore Corporation and American Enterprise Bank in 2018.

Backed by a strong balance sheet and liquidity position, Wintrust will likely continue with its inorganic expansion efforts. Further, the company’s acquisition spree will benefit its revenues and market share.

Shares of Wintrust have gained 0.7%, so far this year, underperforming the industry’s rise of 14.3%.

Currently, Wintrust carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar to Wintrust, several financial institutions are resorting to acquisitions in order to expand their footprint and diversify the revenue mix. Some of these companies include People’s United Financial (NASDAQ:PBCT) , Glacier Bancorp (NASDAQ:GBCI) , and Stifel Financial (NYSE:SF) .

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