Associated Bank (copy)

Associated Bank, whose Sun Prairie branch is shown here, plans to buy Bank Mutual in a $482 million all-stock deal.


The largest bank company based in Wisconsin, Associated Banc-Corp, of Green Bay, is buying the largest bank company based in the Milwaukee area, Bank Mutual Corp., in an all-stock transaction valued at $482 million.

Bank Mutual, of Brown Deer, will merge into Associated Bank, creating a financial institution with total assets of $31.7 billion.

Associated Bank has $29 billion in assets, more than 200 locations and 4,400 employees. It provides financial services in eight states. It was founded in 1970 through the merger of three northeast Wisconsin banks, one of which has roots dating back to 1861.

Bank Mutual began in 1892 when employees of a Milwaukee newspaper combined forces to form a small building and loan association. The third largest bank with headquarters in Wisconsin, Bank Mutual has $2.7 billion in assets and nearly 600 employees. The bank announced in April it would close its Monona branch and sell five other locations, leaving it with 57 banking offices in Wisconsin.

Associated Bank has 19 branches in Dane County; Bank Mutual has three Madison-area branches.

Both publicly traded banks share “customer-centric strategies and understand the importance of delivering increasing value to customers, colleagues, communities and shareholders,” Associated president and CEO Philip Flynn said.

Under terms of the agreement, Bank Mutual shareholders will receive 0.422 shares of Associated common stock for each share of Bank Mutual common stock. Each share is valued at $10.38 based on the closing price of Associated common stock on July 19, 2017.

The boards of directors of both companies have approved the deal. If regulators go along, the transaction is expected to become final in the first quarter of 2018.

UW-Madison School of Business professor of finance James Johannes said he has not analyzed the deal but he is not surprised about it.

“Merger & acquisition is going to be part of the banking landscape in the foreseeable future,” said Johannes, director of the Puelicher Center for Banking Education. “It is not clear that bank margins or spreads will rise nor is it clear that regulatory costs will fall. Therefore, to enhance earnings, banks will have to apply stable or falling margins to higher earning assets.”


Judy Newman is a business reporter for the Wisconsin State Journal.