Wintrust Financial Corporation Completes Its Merger With Macatawa Bank Corporation

Rhea-AI Summary

Wintrust Financial (Nasdaq: WTFC) has completed its all-stock acquisition of Macatawa Bank , expanding into West Michigan. The merger, valued at approximately $510.3 million, or $14.85 per share, adds Macatawa Bank's 26 branches and $2.7 billion in assets to Wintrust's portfolio. Macatawa shareholders received 0.137 shares of Wintrust common stock for each Macatawa share.

This strategic move strengthens Wintrust's presence in the region, bringing its total assets to about $62 billion and expanding its network to over 200 banking locations. The merger aims to combine Wintrust's enhanced services and technology with Macatawa's strong community presence and client-focused culture.

Positive

• Acquisition expands Wintrust's presence into West Michigan market
• Adds $2.7 billion in assets, $2.3 billion in deposits, and $1.3 billion in loans to Wintrust's portfolio
• Increases Wintrust's total assets to approximately $62 billion
• Expands Wintrust's network to over 200 banking locations
• Macatawa Bank to retain its name and operate as a separate charter, maintaining local presence

Negative

• Transaction not expected to have a material effect on Wintrust's 2024 earnings per share
• Potential integration challenges and costs associated with merging operations

Insights

Financial Analyst

The merger between Wintrust Financial and Macatawa Bank marks a significant expansion for Wintrust into the West Michigan market. This strategic move adds approximately $2.7 billion in assets, $2.3 billion in deposits and $1.3 billion in loans to Wintrust's portfolio, boosting its total assets to around $62 billion.

The all-stock transaction, valued at approximately $510.3 million or $14.85 per share, represents a calculated move by Wintrust to strengthen its market position. The conversion ratio of 0.137 Wintrust shares for each Macatawa share seems fair, considering the potential synergies and growth opportunities.

Notably, the merger is not expected to materially affect Wintrust's 2024 earnings per share, suggesting that the integration costs may be offset by immediate operational synergies. This could indicate a well-planned integration strategy, potentially leading to improved efficiency ratios in the medium term.

The retention of Macatawa's brand, key employees and community bank board structure under Wintrust's umbrella is a savvy move. It allows Wintrust to capitalize on Macatawa's strong local presence and customer relationships while gradually introducing its expanded product offerings. This approach could mitigate potential customer attrition often associated with bank mergers.

Investors should monitor the post-merger integration process, particularly how well Wintrust leverages Macatawa's strong core deposit base and asset quality to drive growth in the competitive West Michigan market. The success of this merger could pave the way for Wintrust to pursue similar strategic acquisitions in other regional markets, potentially driving long-term shareholder value.

Market Research Analyst

The Wintrust-Macatawa merger signifies a strategic market expansion that could reshape the competitive landscape in West Michigan's banking sector. By acquiring Macatawa's network of 26 branches across Kent, Ottawa and northern Allegan counties, Wintrust gains a solid foothold in a new geographical market, particularly in the economically significant Grand Rapids area.

This move aligns with the broader trend of regional bank consolidations, as mid-sized banks seek to achieve economies of scale and expand their geographical footprint. The merger allows Wintrust to compete more effectively with larger national banks and local credit unions in the West Michigan market.

The decision to maintain Macatawa's brand identity and community-focused approach is crucial. It demonstrates Wintrust's understanding of the importance of local relationships in community banking. This strategy could help retain Macatawa's customer base while gradually introducing Wintrust's expanded product offerings, potentially increasing cross-selling opportunities and customer lifetime value.

The West Michigan market presents significant opportunities for growth. The region has shown robust economic development, particularly in industries such as advanced manufacturing, life sciences and technology. By entering this market, Wintrust positions itself to capitalize on the area's economic momentum and diversify its revenue streams.

However, the success of this merger will largely depend on Wintrust's ability to execute its integration plan effectively, maintain Macatawa's strong community ties and successfully introduce its expanded services to the new customer base. The market will be watching closely to see if Wintrust can leverage this acquisition to drive meaningful growth and establish itself as a formidable player in the West Michigan banking landscape.

ROSEMONT, Ill. and HOLLAND, Mich., Aug. 01, 2024 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”) (Nasdaq: WTFC) and Macatawa Bank Corporation (“Macatawa”) today jointly announced the completion of their previously announced merger whereby Wintrust acquired Macatawa in an all-stock transaction. Macatawa was the parent company of Macatawa Bank, which is headquartered in Holland, Michigan and operates a network of 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties, including Grand Rapids.

Founded in 1997, Macatawa Bank has an exemplary history of serving its communities. As of June 30, 2024, it had approximately $2.7 billion in assets, $2.3 billion in deposits and $1.3 billion in loans. Macatawa Bank’s approach to customer service is similar to that at each of the fifteen other Wintrust Community Banks and their more than 170 banking locations. Like Wintrust, Macatawa Bank prides itself on delivering outstanding service to both consumer and commercial clients.

Timothy S. Crane, President and CEO of Wintrust, said, “Macatawa Bank provides an ideal platform to expand into West Michigan with a very solid bank. The bank has a strong core deposit base, exceptional asset quality, a client focused culture, and a committed leadership team. Together, we will be a formidable, community-minded competitor to the other banks in the area. We look forward to providing Macatawa Bank’s customers with an expanded array of products and services and are thrilled to welcome Macatawa Bank clients and team members to the Wintrust family.”  

Richard L. Postma, who served as Chairman of the Board of Macatawa prior to the merger, said, “Wintrust provides Macatawa Bank with the ability to retain and enhance its uniquely personalized consumer and commercial community presence in the West Michigan area by retaining the Macatawa Bank name, its key employees, branches, and a legally constituted community bank board, as a separately chartered bank and the only Wintrust subsidiary bank located within the State of Michigan. We are confident that this transaction, which combines similar cultures and operating philosophies, will result in a continued community bank that offers all the enhanced services, products and technology of Wintrust to meet the evolving banking needs of our customers.”

As provided for in the merger agreement, Richard L. Postma has been appointed to the Board of Directors of Wintrust.

Terms of the Transaction

The aggregate purchase price to Macatawa shareholders is approximately $510.3 million, or $14.85 per share. In the transaction, each of Macatawa’s 34,361,562 common shares outstanding at the time of the merger were converted into the right to receive merger consideration paid in shares of Wintrust common stock. Accordingly, each common share of Macatawa outstanding at the time of merger was converted into the right to receive 0.137 shares of Wintrust common stock, with cash paid in lieu of fractional shares. The transaction is not expected to have a material effect on Wintrust’s 2024 earnings per share.

Advisors

Morgan Stanley & Co. LLC acted as financial advisor and Warner Norcross + Judd LLP acted as legal advisor to Macatawa in the transaction. ArentFox Schiff LLP served as legal advisor to Wintrust.

About Wintrust

Wintrust is a financial holding company, now with assets of approximately $62 billion, whose common stock is traded on the NASDAQ Global Select Market. Built on the "HAVE IT ALL" model, Wintrust offers sophisticated technology and resources of a large bank while focusing on providing service-based community banking to each and every customer. As a result of the acquisition of Macatawa, Wintrust now operates sixteen community bank subsidiaries, with over 200 banking locations located in the greater Chicago, southern Wisconsin, west Michigan and southwest Florida market areas. Additionally, Wintrust operates various non-bank business units including business units which provide commercial and life insurance premium financing in the United States, a premium finance company operating in Canada, a company providing short-term accounts receivable financing and value-added out-sourced administrative services to the temporary staffing services industry, a business unit engaging primarily in the origination and purchase of residential mortgages for sale into the secondary market throughout the United States, and companies providing wealth management services and qualified intermediary services for tax-deferred exchanges.

About Macatawa Bank

Headquartered in Holland, Michigan, Macatawa Bank offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities from a network of 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties. The bank is recognized for its local management team and decision making, along with providing customers excellent service, a rewarding experience and superior financial products. Macatawa Bank has been recognized for thirteen years as one of “West Michigan’s 101 Best and Brightest Companies to Work For”.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the federal securities laws relating to the acquisition of Macatawa by Wintrust and integration of Macatawa with Wintrust, the combination of their businesses and projected revenue, as well as profitability and earnings outlook. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements regarding the intent, belief or current expectations. Investors and security holders are cautioned that such statements are predictions, are not guarantees of future performance and actual events or results may differ materially. Completion of the integration activities, expected financial results or other plans are subject to a number of risks and uncertainties.

Additional risks and uncertainties may include, but are not limited to, the risk that expected cost savings, revenue synergies and other financial benefits from the merger may not be realized or take longer than expected to realize.

For further information regarding additional factors that could cause results to differ materially from those contained in the forward-looking statements, see “Risk Factors” and the forward-looking statement disclosure contained in the Annual Report on Form 10-K for the most recently ended fiscal year of Wintrust, and subsequent Quarterly Report on Form 10-Q as well as other documents subsequently filed by Wintrust with the Securities and Exchange Commission. Forward-looking statements included in this press release speak only as of the date made and Wintrust assumes no obligation and disclaims any intent to update or revise any forward-looking statement, whether because of new information, future events or otherwise, except as required by law.  

FOR MORE INFORMATION CONTACT:
Timothy S. Crane, President and CEO – Wintrust Financial Corporation, (847) 939-9000
David A. Dykstra, Vice Chair and COO – Wintrust Financial Corporation, (847) 939-9000
Richard L. Postma, Chairman – Macatawa Bank Corporation, (616) 392-1517

Wintrust Website address: www.wintrust.com
Macatawa Website address: www.macatawabank.com

FAQ

What is the value of Wintrust Financial's acquisition of Macatawa Bank ?

The acquisition of Macatawa Bank by Wintrust Financial (WTFC) is valued at approximately $510.3 million, or $14.85 per share.

How many branches does Macatawa Bank add to Wintrust's network?

Macatawa Bank adds 26 full-service branches to Wintrust's network, located in Kent, Ottawa, and northern Allegan counties in Michigan.

What is the exchange ratio for Macatawa Bank shares in the Wintrust acquisition?

Each share of Macatawa Bank was converted into the right to receive 0.137 shares of Wintrust Financial (WTFC) common stock, with cash paid for fractional shares.

How does the Macatawa acquisition affect Wintrust Financial's (WTFC) total assets?

With the acquisition of Macatawa Bank, Wintrust Financial's (WTFC) total assets increase to approximately $62 billion.

Will Macatawa Bank retain its name after the acquisition by Wintrust Financial (WTFC)?

Yes, Macatawa Bank will retain its name and operate as a separately chartered bank within the Wintrust family, maintaining its local presence in West Michigan.