Equitable Group (EQB) is buying Saskatoon-based Concentra Bank for $470 million.
The deal will boost the asset base of Equitable Group, a bank that primarily provides residential and commercial real estate lending services, by 31%.
Under the terms of the deal, Equitable Group will initially buy an 84% stake in Concentra Bank from the Credit Union Central of Saskatchewan. It said it will subsequently acquire full control through support agreements with other Concentra shareholders.
Concentra Bank, which operates under the Wyth Financial brand and has $11.3 billion in assets, offers savings and loan products, including mortgages, to retail and commercial customers. It also provides services to credit unions.
According to Equitable Group, 55% of Concentra’s loan book is concentrated in Ontario. Alberta represents its second-most important geography, with 19% of the company’s loans.
Separately, Equitable Group said its board of directors approved a 51% dividend increase. Effective with the March 31 payment, shareholders will receive 28 cents per share each quarter, up from the most recent rate of 18.5 cents per share.
Equitable Group reported that its fourth-quarter earnings per share (EPS) rose 11% to $2.29. Analysts, on average, were expecting $2.12 in earnings per share.
The bank benefitted in the quarter from the release of $1.4 million from its credit loan loss provisions. That was less than in the third quarter, when it released $3.5 million from funds that were previously set aside to cover loans that could potentially go bad.
