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Commercial banks

Wisconsin Banks Engulfed in Merger Frenzy, Firstar and Star Banc on Cusp of $5 Billion Deal

Strategic Insights

— 2 min read

Wisconsin-based Firstar Corp. is reportedly on the verge of a massive merger with Cincinnati-based Star Banc Corp., a deal that could top $5 billion, according to the Wall Street Journal. The combined entity would boast an impressive 625 branches across seven Midwestern states and Arizona, solidifying its position as a major player in the region. The potential merger has been in the works for months, with Firstar, the largest Wisconsin-based bank with over $20 billion in assets, and Star Banc, with assets of $14 billion, poised to create a bank of equals.

Key Takeaways:

  • The proposed merger between Firstar Corp. and Star Banc Corp. could be worth over $5 billion, creating a bank with 625 branches across seven Midwestern states and Arizona.
  • Firstar, the largest Wisconsin-based bank with assets of over $20 billion, has lagged behind other regional banks in terms of performance over the past several years.
  • The reported deal is seen as a merger of equals, with both banks maintaining their operating structures and leadership.
  • Star Banc Corp. has impressive recent performance, with its stock price up 173 percent over the past two years, while Firstar's stock is up 45 percent.
  • Firstar's CEO, Roger Fitzsimonds, is expected to take on a role under the new structure, alongside Star Banc's CEO, Jerry A. Grundhofer, who has led the company since 1995.
  • The merger would not lead to major layoffs or changes, as the banks operate in different markets with minimal overlap.
  • The deal is the third merger in three months affecting banks doing business in Wisconsin, following the $29 billion Banc One Corp. merger with First Chicago and the $34 billion Norwest Corp. and Wells Fargo & Co deal.

Statistics:

  • The proposed merger value: over $5 billion
  • Firstar's assets: over $20 billion
  • Star Banc's assets: $14 billion
  • Firstar's branches: 625 (across 7 Midwestern states and Arizona)
  • Star Banc's branches: 627 (across 7 Midwestern states and Arizona)
  • Star Banc's stock price: up 173 percent over the past two years
  • Firstar's stock price: up 45 percent over the past two years
  • Value of Firstar's Firstar Forward program's cost-cutting goals: not all met
  • Number of branches in Wisconsin that would remain after the merger: unclear
  • Operating costs of banks of similar size to Firstar: high
  • Potential number of layoffs in the event of a major consolidation: unclear

Sources:

  • Wall Street Journal (no date mentioned)
  • Dain Rauscher (Ben Crabtree)
  • Robert W. Baird (Ken Hemauer)
  • The Capital Times (no date mentioned)

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