ASB to Deepen Midwest Presence Via $604M American National Buyout

Associated Banc-Corp ASB entered into a definitive merger agreement to acquire American National Corporation and its wholly-owned subsidiary, American National Bank. The all-stock transaction is valued at roughly $604 million.

Details of the Acquisition Pursued by ASB

Per the agreement, Associated Banc-Corp will pay $26.29 per share for each share of American National. The merger agreement has been approved by the board of directors of both entities.
 
The deal is anticipated to be completed in the second quarter of 2026, subject to requisite regulatory approvals. Upon closure, American National will be merged with Associated Banc-Corp and American National Bank will be merged with Associated Bank, N.A., a subsidiary of Associated Bank.

American National, headquartered in Omaha, NE, founded in 1856, operates 33 branches across Nebraska, Minnesota and Iowa, with a concentration in the Greater Omaha and Minneapolis/St. Paul metro markets. As of Sept. 30, 2025, the firm had roughly $5.3 billion in assets, $3.8 billion in total loans and $4.7 billion in deposits.

Upon the deal's completion, Wende Kotouc, co-CEO & co-chairperson of American National Bank, will join Associated Banc-Corp’s board.

The combined entity is anticipated to have roughly $50 billion in total assets, $35 billion in total loans and $40 billion in total deposits.

ASB’s Rationale Behind the Acquisition

This transaction is likely to improve ASB’s deposit mix through low-cost deposits and add more than 79,000 customer deposit accounts to the client base. It will also strengthen the bank’s Midwest scale, with 76% of pro forma deposits in the 10 largest markets across the Upper Midwest. Further, it will enhance the liquidity profile of ASB with a pro forma loan-to-deposit ratio of 88%.

Andy Harmening, president and CEO of Associated Banc-Corp, stated, “This complementary partnership accelerates our growth strategy by deepening our presence in the Twin Cities, establishing our presence in the attractive Omaha market, and broadening our reach across the Midwest.”

ASB will likely benefit from cost savings of 25% (roughly $29 million) of American National’s 2025 non-interest expense, 50% of which will be phased in 2026 and the rest will be realized thereafter. Also, roughly $55 million of one-time pre-tax merger expenses will be incurred, out of which $47 million will be incurred by Associated Banc-Corp.

The deal is anticipated to be roughly 2% accretive to ASB’s 2027 earnings per share, assuming the execution of cost savings. Further, the company projects a common equity tier 1 capital accretion of 5 basis points (bps) at closing and a 24% internal rate of return.

Also, tangible book value per share is expected to dilute by 1.2%, with a projected earn-back period of approximately 2.25 years. Further, Associated Banc-Corp projects an improvement of 60 bps in return on average tangible common equity and 5 bps in return on average assets, alongside a 175 bps improvement in efficiency ratio by 2027, adjusting for the phased-in cost savings.

Our Take on ASB’s Inorganic Expansion Effort

This move aligns with phase 2 of ASB’s strategic plan, announced in 2023, to improve operating efficiency and bolster its balance sheet. The plan focuses on driving growth through customer acquisition and deepening relationships. The company intends to achieve this by acquiring customers, particularly in the mass affluent and private wealth segments, and strengthening its commercial lending business.

Phase 1 of the plan (announced in 2021) has already resulted in the growth of its lending capabilities. It will continue to support core business growth and transform digital capabilities. Associated Banc-Corp is on track with Phase 2 targets and expects the full impact of the initiatives to be realized this year and in 2026.

Shares of Associated Banc-Corp have risen 10.8% compared with the industry’s growth of 2.7% in the past six months. 

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

Similar Steps by Other Banks

Last month, Fulton Financial Corp. FULT agreed to acquire Blue Foundry Bancorp BLFY in an all-stock transaction valued at roughly $243 million. 

Per the agreement, Fulton will pay 0.6500 shares for each share of Blue Foundry. The merger agreement has been approved by the board of directors of both entities.

The deal speeds up Fulton’s expansion in the lucrative northern New Jersey market. It is projected to lift its first full-year earnings by more than 5%, boost tangible book value per share right away and leave regulatory capital ratios unchanged at closing.

Similarly, State Street Corp. STT acquired its long-standing partner, PriceStats, a top provider of daily global inflation data generated from digitally collected prices on millions of consumer products.

PriceStats will be integrated into State Street Data Intelligence, which delivers proprietary data and insights to help clients make more informed investment decisions. The platform also includes State Street Private Capital Indices, a set of benchmarks and analytics built on more than $6 trillion in proprietary private equity and private credit data, supporting the construction and benchmarking of related portfolios.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research