Associated Banc-Corp. chairman H.B. Conlon has more than doubled the size of his Green Bay, Wis., company since 1991, and his move to merge with First Financial Corp. of Stevens Point, Wis.-announced Wednesday-would more than double it again, Mr. Conlon said Thursday.
The 61-year-old Mr. Conlon said the resulting $10.5 billion-asset company would have more clout to do acquisitions outside its existing markets in Wisconsin and Illinois.
Although the $1 billion deal is billed as a merger of equals, the Associated name would be retained, Mr. Conlon would be chairman and chief executive officer, and the headquarters would be in Green Bay.
With Associated's current $4.4 billion of assets, Mr. Conlon said, it has been hard for his company to acquire outside Wisconsin.
"A $10 (billion), $11 (billion), or $12 billion company has an opportunity to look elsewhere in the Upper Midwest," Mr. Conlon said.
With the acquisition of the larger First Financial, a savings and loan, Associated would pass Banc One Corp. as Wisconsin's third-largest banking company. With deposits of $8 billion, it would have a 9% share of the state's deposits, according to SNL Securities. It would be No. 11 in Illinois, with banks in Chicago, Rockford, and Peoria.
Associated will continue to do fill-in acquisitions in Illinois and Wisconsin, Mr. Conlon said. But he's also interested in expanding in the Midwest, including Indiana, Iowa, Minnesota, Michigan, and Ohio.
First Financial is also growing rapidly. John C. Seramur, its chairman and chief executive officer, oversaw 15 acquisitions from 1983 to 1995. "It's difficult to grow earnings much more than where we are without doing acquisitions," said Mr. Seramur, who would become vice chairman of the new company.
The deal could also attract new attention to Wisconsin, where a number of large regional companies have expressed an interest. "It's hard to say whether it will spur deals, but it will open other people's eyes to the state," said Joseph Stieven of Stifel, Nicolaus & Co.
Strategically, the deal makes sense, said John G. Cornwell, an analyst at Cleary Gull Reiland & McDevitt Inc. First Financial is an efficient bank-like consumer company with a credit card operation, while Associated has commercial, trust, and investment businesses. He thinks the new Associated will continue to expand.
The combined company would take at least a $40 million after-tax charge to earnings in the fourth quarter. Associated estimated the deal would add to earnings by 1998 and be completed by yearend.