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

Core Viewpoint - Associated Banc-Corp (ASB) has entered into a definitive merger agreement to acquire American National Corporation for approximately $604 million in an all-stock transaction [1][11]. Acquisition Details - ASB will pay $26.29 per share for American National's shares, with the merger approved by both companies' boards [2]. - The deal is expected to close in the second quarter of 2026, pending regulatory approvals [3]. Company Background - American National, founded in 1856 and headquartered in Omaha, NE, operates 33 branches across Nebraska, Minnesota, and Iowa, with total assets of approximately $5.3 billion as of September 30, 2025 [4]. - The firm has $3.8 billion in total loans and $4.7 billion in deposits [4]. Combined Entity Projections - Post-merger, the combined entity is anticipated to have around $50 billion in total assets, $35 billion in total loans, and $40 billion in total deposits [5]. Strategic Rationale - The acquisition is expected to enhance ASB's deposit mix with low-cost deposits and add over 79,000 customer deposit accounts [6]. - The merger will strengthen ASB's presence in the Midwest, with 76% of pro forma deposits in the 10 largest markets across the Upper Midwest [6]. - ASB anticipates cost savings of 25% (approximately $29 million) from American National's 2025 non-interest expenses, with $55 million in one-time pre-tax merger expenses expected [7]. Financial Impact - The deal is projected to be approximately 2% accretive to ASB's 2027 earnings per share, assuming successful execution of cost savings [8]. - A common equity tier 1 capital accretion of 5 basis points is expected at closing, along with a 24% internal rate of return [8]. - Tangible book value per share is expected to dilute by 1.2%, with a projected earn-back period of about 2.25 years [9]. Efficiency and Performance Improvements - ASB expects a 60 basis points improvement in return on average tangible common equity and a 175 basis points improvement in efficiency ratio by 2027, adjusting for phased-in cost savings [9]. - The acquisition aligns with ASB's strategic plan to improve operating efficiency and bolster its balance sheet, focusing on customer acquisition and deepening relationships [12]. Market Context - ASB's shares have increased by 10.8% over the past six months, compared to the industry's growth of 2.7% [13].