On Tuesday, BOK Financial Corporation (BOKF) announced a deal for the acquisition of Houston-based MBM Advisors, an independent full service retirement and pension plan investment company. Financial terms of the agreement were not disclosed. Further, the acquisition is anticipated to be completed in second-quarter 2014.
The acquisition by BOK Financial demonstrates its aim of diversifying its revenue opportunities by expanding the fee-based business. Moreover, the company expects to leverage the innovative wealth management potential of MBM Advisors across its geographic footprints. Further, following the acquisition, the company’s assets under management would increase by $1.25 billion.
Previously, the company had purchased United Banks of Colorado in 2007 and Colorado State Bank and Trust in 2003. In 2012, BOK Financial completed the acquisition of Denver-based The Milestone Group Inc., a wealth management firm. Recently, it also completed the acquisition of Kansas-based GTRUST Financial Corporation, an independent trust and asset management company, which added assets worth $600 million to BOK Financial.
MBM Advisors, acting as registered investment advisor for both retirement plans and individual clients, was founded in 1966. The firm fully manages clients’ employee retirement and pension plans including investment advisory services.
Having strengthened its foothold over the years through its local bank brand, Colorado State Bank and Trust, BOK Financial enjoys a robust presence in Denver. Therefore, with the acquisition of MBM Advisors, the company will expand in Houston aided by 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 retirement plan services and investment advices to clients.
Notably, amid the current regulatory environment, there had been pressure on businesses for providing retirement benefits. Therefore, expansion in retirement planning services at the current level will be beneficial for BOK Financial.
On the other hand, the deal widens MBM Advisors’ 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 MBM Advisors will have access to the additional services and products provided by BOK Financial, while the latter will take advantage of MBM Advisors’ investment management expertise.
Our Viewpoint
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 better-ranked companies in the same sector worth considering include Southside Bancshares Inc. (SBSI) with a Zacks Rank #1 (Strong Buy), while Prosperity Bancshares Inc. (PB) and BancFirst Corporation (BANF) carry a Zacks Rank #2 (Buy).
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