On Wednesday, BOK Financial Corporation (BOKF) announced a deal for the acquisition of Kansas-based GTRUST Financial Corporation, an independent trust and asset management company. Though the share price of BOK Financial was expected to get a boost after the announcement, it declined slightly based on market dynamics and stood at $62.71.
Financial terms of the agreement were not disclosed. Further, the acquisition is anticipated to be completed before the end of the fourth quarter 2013, subject to certain customary regulatory approval.
The acquisition by BOK Financial demonstrates its aim of diversifying its revenue opportunities by increasing its fee-based business. This is the first acquisition of a fee-only financial planner by the company. Moreover, BOK Financial expects to leverage the new wealth management potential of GTRUST across its geographic footprints. Further, following the acquisition, the company’s assets under management would increase by $600 million.
Previously, the company had purchased United Banks of Colorado in 2007 and Colorado State Bank and Trust in 2003. Last year, BOK Financial completed the acquisition of Denver-based The Milestone Group Inc., a wealth management firm. Notably, over the period of one year, The Milestone Group has increased its discretionary assets by 19%.
GTRUST Financial, which provides varied financial services in Topeka, Wichita, Marysville, Larned and Overland Park, was founded in 1991. The services provided by the firm includes asset and risk management, tax planning, fee-only financial planning, debt management, estate planning and charitable capital strategy.
Having strengthened its foothold over the years, through its local bank brand, Colorado State Bank and Trust, BOK Financial has a robust presence in Denver. Therefore, with the acquisition of GTRUST Financial, the company will expand in Kansas with the help of the acquired firm’s wealth management brand and proficiency.
With the aim of providing a wide array of investment products to its clients, BOK Financial has become enthusiastic in making acquisitions and preparing a platform for growth. Moreover, this acquisition depicts the company’s efforts toward providing quality investment services and advice to clients.
On the other hand, the deal widens GTRUST Financial’s scope and will help its expansion efforts with the commitment of providing investment decisions to its clients. Moreover, there will be no change in the company’s current client teams.
Overall, the clients of GTRUST Financial will have access to the additional services and products provided by Colorado State Bank and Trust, while BOK Financial will take advantage of GTRUST Financial’s investment management potencies.
The acquisitions of such asset management companies are welcome as they play a major role in preserving investor confidence in the stock. We also believe that BOK Financial’s diverse revenue stream, sturdy capital position and expense control initiatives augur well for investors.
Capital deployment efforts also bode well and boost investors’ confidence. Nevertheless, a protracted economic recovery and its exposure to the energy sector and risky assets remain our concerns.
BOK Financial currently carries a Zacks Rank #3 (Hold).Some companies in the same sector that are worth considering include BofI Holding, Inc. (BOFI) and Central Pacific Financial Corp. (CPF) with a Zacks Rank #1 (Strong Buy), while Prosperity Bancshares Inc. (PB) carries a Zacks Rank #2 (Buy).
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