Firm to buy Wells Fargo sites
Flagstar Bancorp, Inc. has signed a definitive agreement to acquire 52 Wells Fargo Bank branches in Indiana, Michigan, Wisconsin and Ohio, including the Wabash branch.
The sale will provide Flagstar Bank 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 percent based on balances as of Dec. 31, 2017. Management expects the transaction will be moderately accretive to 2019 earnings per share.
"We're excited to welcome the Wells Fargo employees and customers to Flagstar Bank," said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp, Inc. "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. We are confident customers will like Flagstar's big bank line-up of quality products and services delivered with the high-touch personal service of a community bank. Flagstar has a long tradition of supporting its communities and fully expects to continue its commitment to good corporate citizenship and community reinvestment in our expanded market area.
"Being able to increase our presence in the Midwest market–a geography we know well and find very attractive–is a terrific opportunity for us. This transaction significantly expands our banking footprint, more than doubling our 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. This acquisition strengthens our funding platform and enhances franchise value."
The 52-branch purchase is for 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. The transaction brings liquidity that the Company can use to repay short-term Federal Home Loan Bank advances. Longer term, a larger branch network will expand access to core deposits and other business opportunities.
The branches to be acquired will operate as Wells Fargo branches until closing, and will be re-branded as Flagstar branches immediately upon closing of the transaction. Flagstar intends to keep all branches and retain all employees at closing.
This transaction is subject to regulatory approval and customary closing conditions, and is expected to close in the fourth quarter of 2018.