Another Illinois acquisition furthers growth plans at State Financial

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Hales Corners-based State Financial Services Corp. has taken a big step in positioning itself as a key player in the community banking realm with the acquisition of an Illinois bank holding company, furthering its presence in that state.
State Financial Services, a publicly-held company that has banks throughout the Milwaukee area and in northern Illinois, increased its Illinois presence by acquiring First Waukegan Corp., which has operated Bank of Northern Illinois.
The Illinois holding company has ceased to exist as a result of the acquisition while the banks will continue to operate as separately-chartered community banking organizations, said Michael J. Falbo, president and CEO of State Financial Services.
“The acquisition of First Waukegan continues our expansion into the Illinois market and puts our total assets over the $1 billion mark,” Falbo said. “The acquisition provides us with three additional components to further the business plan undertaken with our merger with Home Federal Savings of Elgin: complementary locations, the addition of trust services, and the ability to leverage our balance sheet.”
State Financial Bank has had facilities in Richmond and Libertyville, Ill.
The acquisition is expected to aid State Financial Services Corp.’s plans to become a strong player in its tier of community banking – plans which have included diversification into other financial services areas: insurance, trust and asset management, and mortgages, and brokerage. The trust services acquired from First Waukegan will now be offered throughout State Financial.
“That’s the future,” Falbo says of the industry and State’s diversification. “It’s kind of a misnomer to call it a banking industry any more.”
Falbo, who was born in Chicago but raised in Kenosha, spent 10 years with Milwaukee’s old Marine bank before joining State Financial 16 years ago.
But the Vietnam veteran, who used the GI Bill to support his education at UW-Parkside, got his start in the working world selling insurance. “I was successful, but ran out of relatives,” Falbo wryly says of the career. And, noting that State Financial now has an insurance subsidiary – State Financial Insurance Agency, he adds, “Now, I’ll be calling you again.”
When he joined State Financial 16 years ago, the company had $75 million in assets and two locations: Hales Corners and Muskego. [Founded in 1910, the original bank building is within eyesight of the new bank and corporate headquarters at Forest Home Avenue and Janesville Road in Hales Corners.] With the recent acquisitions, the holding company now has 21 full-service bank office locations.
The company went public in 1992, bringing in capital to foster its growth plans and to help position itself solidly amid increased regulation fostered by deregulation and general changes in the industry. “There is good, strong competition here,” notes Falbo. “Wisconsin is blessed with a very solid banking industry and the Milwaukee area has a lot of hard, but friendly, competitors.”
Falbo envisions immediate future growth for the bank within its southeastern Wisconsin and northern Illinois territories, with the bank’s growth coming both from core growth and via acquisition. Beyond that, the bank will look at expanding into new territories.
But at the present, “We have a lot of work to assimilate the latest two acquisitions, to gain the efficiencies they afford,” Falbo says.
These days, Falbo spends much of his time on the road, visiting the bank’s facilities in the two states – often accompanied on the out-of-town trips by his wife Sheila.
The two can also frequently be seen together at events related to business and to the many charitable and civic organizations which Falbo lends himself to, including UW-Parkside where he chairs the Benevolent Foundation.
“It’s great to be able to give something back and I’m so thrilled I can do it at Parkside ” he says. Sheila is also charitable with her time in a variety of ways, including volunteer work at St. Joseph Hospital in Elgin – work done when the Falbos are in that town for bank work.

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