BOK Financial Obtains Fed Nod To Acquire MBT Bancshares

Oklahoma-based financial holding company BOK Financial Corporation (NASDAQ:BOKF) has received approval from the Federal Reserve regarding its deal to acquire MBT Bancshares, announced in Dec 2015. The approval entitles BOK Financial to indirectly acquire Missouri Bank and Trust of Kansas City (“mobank”), the subsidiaries of MBT Bancshares.

The deal received approval from board of directors of both the concerned parties and was in its final phase of obtaining regulatory approval from the Fed, following which the bank expects to close the acquisition by the end of 2016. It is an all-cash deal, valued at $102.5 million.

Background

Founded in 1891, mobank is a Kansas City-based private bank, which operates four banking divisions across the region. Renowned for its organic growth history and differentiated approach toward customer service, mobank has reportedly been on BOK Financial’s radar, of late, as the latter seeks to grow inorganically in the region.

During announcement of the deal, executive vice president of Regional Banks for BOK Financial – Norm Bagwell – stated, “mobank fits well with our legacy Kansas City operation and its differentiated strategy in consumer banking and proven expertise in business banking will augment Bank of Kansas City’s commercial banking, wealth management, and mortgage banking presence.”

Notably, the acquisition will fortify BOK Financial’s footprint in Kansas City. The company presently offers full-banking services in the region under the Bank of Kansas City brand, with branches in markets like Overland Park, KS, and Lee’s Summit, MO.

In addition, the bank anticipates the acquisition to drive its earnings per share between $0.04 and $0.06 in 2017, reflecting a marginal increase in initial estimate of $0.03 per share. Notably, such estimates exclude integration-related costs. Further, the company projects an internal rate of return of 13%.

Our Viewpoint

BOK Financial is well-positioned for top-line growth driven by its constant expansion moves through acquisitions. The company has continued its expansion into carefully selected markets in the neighboring states. Notably, in Jan 2016, the company closed an asset purchase deal with Dallas-based energy investment banking firm, Spectrum Advisors. Further, the bank completed the acquisition of Weaver Wealth Management in Mar 2016 to boost its asset management business.

We remain optimistic about the company’s growth prospects, aided by its diverse revenue mix and continuous loan growth.

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

Other better-ranked stocks in the Finance space include Farmers Capital Bank Corporation (NASDAQ:FFKT) sporting a Zacks Rank #1, Mutualfirst Financial Inc. (NASDAQ:MFSF) and Flagstar Bancorp Inc. (NYSE:FBC) , both holding a Zacks Rank #2 (Buy). Notably, all the above mentioned stocks have outpaced the Zacks Consensus Estimate in atleast three of the trailing four quarters, recording positive average earnings surprise.

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