Wintrust looks at multiple acquisitions

By Becky Yerak
Posted Jan. 24 at 3:13 p.m.

OMG. That’s what Wintrust Financial Corp. Chief Executive Ed Wehmer, whose Lake Forest-based company is the first locally headquartered mid-sized bank to repay its bailout money to the U.S. Treasury Department, says he has said when looking at 20 to 25 potential acquisitions recently.

Wintrust hasn’t pulled the trigger on any of them because of their credit problems.

“You get in there, and you go, ‘Oh my God,’” said Wehmer, whose $14 billion-asset company owns 15 banks. Also, the potential acquisition targets didn’t have that great of a franchise, he said.

But he told analysts during an earnings conference call that Wintrust will continue to see plenty of opportunities and therefore isn’t planning to hike its dividend or buy back shares in the near term.

“We get pinged by potential targets every week,” Wehmer said. He also noted that some of the other mid-sized Chicago-area banks who might have competed against Wintrust for deals are “hamstrung by some of their issues.”

Wehmer said his favorite deals involve banks with assets of $500 million to $200 million.

“We expect this year to be a very active year,” Wehmer said. “It has been an active month already in terms of looking at a lot of things.”

Many of the deals that Wintrust has looked at involved banks that are too risky and haven’t recognized their problems.

“There’s still a bit of kicking the can down the road,” he said. But “hope is not a legitimate strategy.”

Wehmer also said the company’s new lending office in downtown Chicago is off to a “terrific start.”

Wehmer also said that each of Wintrust’s 15 banks will resume opening a branch every two years. It stopped doing so in 2006 as the bank saw signs of trouble in the economy and began hunkering down.

“That was our bread and butter for years,” noted Wehmer, whose bank has grown in branch footprint recently largely through some purchases of failed banks.

He also said that, while many banks are “running away from” commercial real estate lending, Wintrust banks are doing more of it, particularly to wealthy people and funds buying distressed assets at greatly reduced prices. He likened Wintrust to being a salmon swimming upstream.

Lake Forest-based Wintrust Financial Corp. reported fourth-quarter net income of $14.2 million, or a loss of 6 cents per share, compared with a fourth-quarter earnings of $28.2 million, or 90 cents a share, in the comparable year-ago period.

The company noted that in December it completed a capital offering that generated $327.5 million of net cash proceeds and added $284.2 million to its capital base, which allowed Wintrust to fully repurchase its $250 million of TARP securities from the Treasury Department in December.

For the year, Wintrust earned $63.3 million, or $1.02 a share, compared with 2009 earnings of $73 million, or $2.23 a share.

Tribune reporter Mary Ellen Podmolik contributed to this article.

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