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Morgan Stanley (MS) Work Solutions to Acquire American Financial

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Morgan Stanley at Work, which is Morgan Stanley's MS workplace financial solutions that help employees achieve their life goals, announced that it would acquire the leading provider of nonqualified deferred compensation plans, American Financial Systems.

The terms of the deal, expected to close in Fall 2022, have not been disclosed.

American Financial’s full-service deferred compensation plan offerings include plan design consulting that helps assess a sponsor’s objectives alongside retirement plan consultants and financial advisors, and plan implementation and online enrollment that provides a single point of contact to manage documentation, help get set up on Deferral.com, and monitor participant enrollment.

It also includes funding analysis and optimization, as well as client management and plan recordkeeping.

Jed Finn, the head of Corporate & Institutional Solutions and COO of Morgan Stanley Wealth Management, stated, “The workplace is a key story to watch over the next five years in the wealth management industry. It is the single most important source of wealth creation, and at Morgan Stanley we have been hard at work creating an end-to-end integrated offering where we can help plan participants reach their financial goals and corporations manage the full spectrum of their financial wellness, equity, and now with the addition of AFS, deferred cash offerings.”

The head of Morgan Stanley at Work, Brian McDonald, said, “Attracting, retaining, and motivating top talent is a top priority for our clients and their organizations. In response, deferred compensation plans have grown in popularity as plan sponsors increasingly explore new practices to round out their compensation structures. Combining AFS with our workplace offering along with the proficiency of our Financial Advisors creates a powerful value proposition for plan sponsors and their participants.”

Over the past year, shares of MS have lost 14.5% compared with a decline of 22.8% recorded by the industry.

 

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Currently, Morgan Stanley carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inorganic Growth Efforts by Other Finance Companies

First Bancorp FBNC announced that it signed a definitive merger agreement to acquire GrandSouth Bancorporation in an all-stock transaction. The deal is valued at $181.1 million or $31.43 per share, based on FBNC’s stock price as of Jun 17, 2022.

At closing, shareholders of GrandSouth will receive 0.910 shares of FBNC’s common stock for each share of GrandSouth's common and preferred stock they own.

Given GrandSouth Bank’s footprint of eight branches in South Carolina, the acquisition enables First Bancorp to scale in its targeted markets, including Greenville, Fountain Inn, Anderson, Greer, Columbia, Orangeburg and Charleston. With a focus on small business banking, the acquisition complements First Bank's strengths in that area.

Earlier this month, F.N.B. Corp FNB signed an agreement to acquire Greenville-based UB Bancorp to bolster its presence in North Carolina. The all-stock deal is valued at $19.56 per share or nearly $117 million, based on the closing stock price of FNB as of May 31, 2022.

Following the deal completion, expected in the last quarter of 2022, F.N.B. Corp will likely move to the eighth position in North Carolina in terms of deposit market share. Also, the cost of deposits of 11 basis points will be accretive to the company’s financials in a rising rate environment.


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