Dive Brief:

• Green Bay, Wisconsin-based Associated Bank has agreed to acquire Omaha, Nebraska-based American National Bank in an all-stock deal valued at $604 million, the companies said Monday.
• Privately held American National would give $44 billion-asset Associated 33 branches across Nebraska, Minnesota and Iowa, and $5.3 billion in assets, $3.8 billion in loans and $4.7 billion in deposits, according to a news release.
• The acquisition, expected to close in the second quarter of 2026, would make Associated Bank the No. 2 bank in the Omaha metro area and the No. 10 bank in the Minneapolis-St. Paul metro area by deposit market share. 

Dive Insight:

Acquiring American National bolsters Associated’s scale in the Midwest, executives said Monday. Associated has about 200 branches across Wisconsin, Illinois, Minnesota and Missouri. The bank also has loan production offices in Indiana, Kansas, Michigan, New York, Ohio and Texas.

When an analyst remarked during a conference call Monday that the Omaha move seemed surprising, Associated CEO Andy Harmening replied, “You say surprising, I say contiguous.”

Omaha is “a great banking market,” with strong population and economic growth, Harmening said. “This market actually grows faster than many of the markets that we’re in today,” the CEO said. 

And American National’s family ownership in a hyper-local market is crucial, he indicated. “If you're going to buy a bank in Omaha … you better have connectivity to the community, and we do,” Harmening said. 

American National would give Associated an additional 79,000 customer deposit accounts. The smaller, commercially focused lender, founded in 1856, serves middle-market and family-owned businesses, according to an investor presentation. 

Associated, meanwhile, brings American National more capabilities such as capital markets and equipment finance, and a stronger consumer product set. 

Under the deal’s terms, American National shareholders will receive 36.250 shares of Associated stock for each share of American National stock. The transaction’s value is based on Associated's closing price of $26.29 as of Friday. Associated would own 88% of the combined entity would be 88% owned, and American National would have a 12% stake, according to the release.

The deal is expected to be about 1.2% dilutive to tangible book value per share at close, with a 2.25-year earnback period. It’s projected to be 2% accretive to 2027 earnings per share.

The boards of both Associated and American National have approved the transaction, and American National's two primary shareholders, who together own 99% of the company, have voted to approve the deal, according to the release.

“This complementary partnership accelerates our growth strategy by deepening our presence in the Twin Cities, establishing our presence in the attractive Omaha market, and broadening our reach across the Midwest,” Harmening said in the release. “Importantly, we believe Associated is a natural fit for American National thanks to our customer-centric approach, our industry-leading products and services, and our focus on supporting and uplifting the communities we serve.”

American National will receive one seat on Associated’s board, which American National Bank co-chairperson and co-CEO Wende Kotouc will fill, and the combined company will establish an Omaha advisory board, according to the investor presentation. American National Corp. executive co-chairperson and co-CEO John Kotouc will remain in a consultancy role. 

“Our organizations share a long history of success supporting client and community growth across the Midwest,” John Kotouc and Wende Kotouc said in a joint statement. “We are confident that this partnership will enhance the value and capabilities of our trusted banking services. Our teams will continue to provide the convenient, local, dependable and personalized service that our clients have enjoyed for decades.”

When analysts asked during Monday’s conference call if more M&A might be considered to continue filling out bare spots in the Midwest map, Harmening didn’t rule out further acquisitions.  

“This is more of a right deal, right partner, right time, right markets situation for us,” Harmening said of American National. The purchase enhances the bank’s organic growth plans – greater scale in the Minneapolis area has been a goal of Associated’s, Harmening noted – and becoming a serial acquirer is “not our intent,” he said. 

Truist Securities analyst Brian Foran, in a Monday note, said Associated’s branch map will now have “a notable hole” in Iowa, “although when pressed on the footprint the CEO just emphasized ‘we are a Midwest bank’ and ‘we like markets we understand.’”

The deal announcement comes just about a month after another Green Bay-based lender, Nicolet Bankshares, said it would buy Iowa City, Iowa-based MidWestOne Financial Group in an $864 million deal. That purchase is also set to bolster the acquiring bank’s presence in the Twin Cities.

Bank M&A activity has soared this year given pressure on smaller lenders related to technology expenses and succession challenges, and regional banks seeing greater scale as essential to challenging the top U.S. lenders. The third quarter saw the most dealmaking among banks in four years, according to S&P Global Market Intelligence.