To make a significant mark in the home renovation financing market, Regions Bank has decided to purchase EnerBank USA. The companies reported the deal on 8th June at the value of 960 million dollars in cash.
Affiliate of publicly-traded CMS Energy, Utah-origin home improvement lending business, EnerBank reached about 2.8 billion dollars in loan balances on 31st March. Since its establishment in 2002, the Salt Lake City-based financier claims to have served more than 1 million homeowners and invested $11.6 billion in home renovation projects. EnerBank claims to deal with 10,000 contractors and provide custom credit plans for their customers. The majority of EnerBank's loans are funded on its financial statements through FDIC-insured brokered C.D.s, and the fees charged on contractors.
The acquisition reflects Regions' objective of acquiring firms that provide valuable extra services to its clients. Other purchases by Regions comprise Ascentium Capital, Texas’ equipment financing and leasing firm in the previous year. And, in 2019, Highland Associates Inc, the NewYork's institutional investing group. With the inclusion of EnerBank, Regions Bank extends a broader range of lending options to homeowners, including point-of-sale home renovation funding.
The Senior Executive and V.P. of Region Bank, Scott Peters, is very excited to infuse the EnerBank team into his institution. He says that this agreement will speed up the Region's approach to become the renowned lender to property owners. This will be achieved by providing more innovative financial products and services that prioritize flexibility to offer excellent customer service in the country. Moreover, Peters, who is also the head of Consumer Banking Group in the Regions, believes that EnerBank is the perfect partner at the right moment to help them achieve their goals.
On the contrary, the CEO and President of EnerBank, Charlie Knadler, stated in support of Regions. He said that joining Regions Ener will have tremendous potential to connect new customers with custom-tailored home renovation finance choices.
The EnerBank crew has a proven dedication to offering a client experience that combines technology and financial knowledge to assist contractors and customers in completing projects with fast and cost-effective finance solutions.
The team of EnerBank and Knadler will enter Regions' Consumer Banking Group, which will be a subordinate to Peters. EnerBank will keep its headquarters in Salt Lake City, with a retail outlet, a new Class A workplace, and a part of 650 Main under construction downtown, set to be occupied by the company. The purchase of EnerBank by Regions from CMS is decided to end in the fourth quarter of this year. However, this will only be followed after regulatory clearances and the fulfillment of normal closing conditions.
Concerning this acquisition, Stephens Inc., operated as Regions' financial advisor, while Sullivan & Cromwell LLP represented Regions' legal representation. CMS Energy was advised financially by Goldman Sachs & Co. LLC, while legal guidance was provided by Skadden, Arps, Slate, Meagher & Flom LLP.
A Brief Overview of both the companies:
Regions Financial Corporation: One of America's leading banking and mortgage service providers, Region Financial Corporation, has gross assets of 153 billion dollars. It’s an NYSE listed firm with a market cap of above 20 billion dollars. It offers its services in Texas, Midwest, and the South and runs over 1,300 banking workrooms and 2,000 ATMs via its divisions. As per the sources, Regions has generated 15 billion dollars in loans the year before.
EnerBank: EnerBank USA is dedicated to assisting strategic business associates and home renovation contractors in increasing sales while also assisting individuals in realizing their home renovation goals. It has a total of 147 companies and had total revenue of 267.70 million dollars in 2020. It’s an FDIC insured bank that collaborates with large retailers, franchisors, dealers, service and product makers of energy-saving, restoration, and home repair.