St. Francis Bank absorbed by $5 billion Illinois bank
The Milwaukee bank that promotes itself as "small enough to care but big enough to get you there" may have to change the content of its advertising program. St. Francis Capital Corp. — parent to St. Francis Bank — is being acquired by MAF Bancorp Inc. of Clarendon Hills, Ill.
Bankers serving southeastern Wisconsin say the absorption of St. Francis will present pluses and minuses to those seeking commercial loans.
While the legal lending limit of the combined institutions will allow for financing of larger deals, local lending decisions may have to be made elsewhere, depending on how MAF manages its acquisition.
MAF, parent to Mid America Bank, will acquire St. Francis in an all-stock, strategic alliance. The transaction — which will expand MAF’s market presence into the Milwaukee area — should be completed by the fourth quarter of this year. St. Francis has assets of about $2.3 billion and 22 branch offices in Milwaukee and its surrounding areas.
Each share of St. Francis common stock will be converted into 0.79 shares of MAF common stock. Following the completion of the St. Francis acquisition and a previously announced acquisition of Chicago-based Fidelity Bancorp, MAF will have total assets of more than $9 billion and a market capitalization of approximately $1.1 billion.
Both banks are organized as savings banks and are focused heavily on real estate.
According to Wisconsin Business Bank chairman Russ Schuler, the merger will present advantages and disadvantages in the market.
"Nationally, any time there is a transaction like this, on the positive side it gives them a large legal lending limit," Schuler, whose organization has locations in Sheboygan and Green Bay, said. "In terms of the decision making, the decision making is left alone for a year or two and after that it is more centralized and disciplined."
Conrad Kaminski, president, Merchants & Manufacturers Bancorporation, Milwaukee, said that while St. Francis Bank will continue to operate under its own nameplate, some elements of the consolidation could result in the loss of local control.
"It depends on how MAF is going to treat them," Kaminski said. "In our organization, when we purchase a bank, we leave the name in place. We leave the board in place. We keep the charter in place. Each one has its own charter, its own $100,000 of FDIC deposit insurance."
Jon Sorenson, executive vice president and chief financial officer at St. Francis Bank, said his bank will operate under MAF’s charter. St. Francis Bank’s board will eventually be dissolved.
"Our full board will be an advisory board for one year," Sorenson said. "Our bank will merge into their bank."
But Sorenson stressed that St. Francis Bank’s commercial bankers and lending decisions would stay in the Milwaukee area – at least until a deal to be financed gets big enough to require involvement of the Chicago office. Sorenson could not identify how large a deal would be before the decision would be kicked upstairs to MAF.
May 30, 2003 Small Business Times, Milwaukee
