Magazine article American Banker

State Financial of Wis. Merges Its Four Banks

Magazine article American Banker

State Financial of Wis. Merges Its Four Banks

Article excerpt

Wisconsin's State Financial Services Corp. is abandoning its multibank structure in favor of efficiency, a move it hopes will not jeopardize customer relationships when four banks become one.

Daniel L. Westrope, an analyst at Howe Barnes Investments in Chicago, lauded the move, however, initiating coverage of the $222 million-asset company with a "buy" rating.

State Financial Services at a Glance

Headquarters:    Hales Corners,
                 Wis.
President        Michael J. Falbo
and CEO:
Assets:          $222 billion
Return on        0.88%
assets:
Return on        7.85%
equity
First-quarter    $485,267
net income
Tier 1 leverage  11.07%
ratio
  Source: Howe Barnes
Investments/State Financial Services Corp.

"By '95, their earnings will justify a higher price on their stock," Mr. Westrope said. "Now's the time to buy it ... while it's still undervalued in the marketplace."

Four Predecessors

State Financial, based in Hales Corners, Wis., has consolidated its four banks -- State Bank, Hales Corners; University National Bank, Milwaukee; Edgewood Bank, Greenfield; and Eastbrook State Bank, Brookfield -- into State Financial Bank.

"They had kept them deliberately separate for a while, thinking the customers would be more responsive to that," Mr. Westrope said.

But now, Michael J. Falbo, president and chief executive of the holding company and vice chairman and chief executive of the bank, says, "The goal is to get ourselves in a position so we can be more efficient and look at expansion."

$200,000 Savings Seen

While retaining existing employees and board members, the consolidation will generate data-processing and administrative cost savings of about $200,000 annually. …

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