hares of Wintrust Financial Corporation (NASDAQ:WTFC) lost 2.71% in a full trading session following the announcement of a public offering of 3,000,000 shares of its common stock on Wednesday, after the market closed. Notably, the company is offering primary shares.
The price reaction perhaps reflected the investors concern as an increase in a company's capital position dilutes its earnings which is now spread among a larger number of shareholders. Further, the overall market sentiment was bearish as well.
However, reinvestment of funds generated from the offering in beneficial areas may in turn boost earnings and share price in the near term. Notably, Wintrust Financial expects to utilize the net proceeds from the offering in a number of purposes including making investments at the holding company level, providing capital to aid the company’s growth and lowering or refinancing existing debt.
The Illinois-based company also intends to deploy the net proceeds in acquisitions, including the FDIC-assisted ones. Interestingly, since 2015, Wintrust has announced four acquisition deals including Generations Bancorp, Inc., which was completed in April this year.
Raymond James & Associates, Inc., a subsidiary of Raymond James Financial, Inc. (NYSE:RJF) is serving as the sole underwriter for the offering.
Wintrust Financial currently sports a Zacks Rank #1 (Strong Buy). A couple of similarly-ranked stocks in the finance space include First Bancorp (NYSE:FBP) and Southside Bancshares Inc. (NASDAQ:SBSI) .
WINTRUST FINL (WTFC): Free Stock Analysis Report
FIRST BNCRP P R (FBP): Free Stock Analysis Report
SOUTHSIDE BANCS (SBSI): Free Stock Analysis Report
RAYMOND JAS FIN (RJF): Free Stock Analysis Report
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