Flagstar Bancorp, a full service retail bank and one of the largest mortgage lenders in the U.S. by volume, has signed a definitive agreement to acquire 52 Wells Fargo Bank branches in Indiana, Michigan, Wisconsin and Ohio, with approximately $2.3 billion in deposits and $130 million in loans, along with certain related assets.
Flagstar will pay an effective deposit premium of approximately 7% based on balances as of Dec. 31, 2017. Management expects the transaction will be moderately accretive to 2019 earnings per share.
Alessandro DiNello, president and CEO of Flagstar, says the acquisition is a “terrific opportunity” for the bank to increase its presence in the Midwest, “a geography we know well and find very attractive.”
“Wells Fargo’s primary goal throughout the negotiation of this transaction has been to make sure its customers and employees experience a seamless transition to Flagstar, and we will ensure that happens,” DiNello says in a release.
The deal significantly expands Flagstar’s banking footprint and more than doubles its customer base.
“We’re also excited about the opportunity to meaningfully transform the bank’s balance sheet, while benefiting from funding that’s both more efficient and less sensitive to rising interest rates,” DiNello adds. “This acquisition strengthens our funding platform and enhances franchise value.”
The deal includes 33 locations in Indiana, including 26 branches in Fort Wayne; 14 branches in the Upper Peninsula of Michigan; four locations in Wisconsin; and one in Ohio.
At closing, Flagstar expects to have 151 branches in the Midwest and eight in California.
Flagstar says it intends to keep all branches and retain all employees at closing, which is expected to occur in the fourth quarter.
