Principal acquires Ascensus’ ESOP business
Principal Financial Group has announced a definitive agreement with Ascensus to acquire its employee stock ownership plan (ESOP) business. At closing, Principal will add approximately 800 plans and more than 165,000 participants to its workplace savings and retirement solutions business.
“Growth is an integral part of our retirement strategy at Principal, and we’re excited to add scale and deepen our expertise with the addition of experienced talent and solutions from Ascensus,” said Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal. “This acquisition strengthens the systems and capabilities that have made Principal a leader in retirement.”
Through this acquisition, Principal will gain full ownership of the ESOP recordkeeping business from Ascensus, along with its ESOP Economics consulting group and Telescope software. All products, clients, and employees will transition to Principal at the time of close, which is anticipated around the end of the second quarter of 2024. As Ascensus ESOP clients and participants are transitioned, they will be exposed to enhancements on the Principal recordkeeping platform such as digital access, support, and account management tools as well as audit process improvements to reduce time.
“After getting the opportunity to review Ascensus’ ESOP business more intimately, we found it to be very complementary to the expertise Principal has as a total retirement solutions provider,” said Andrew Matos, head of stock plan services for Retirement and Income Solutions at Principal. “The acquisition positions us to offer greater value, enhanced services, and stronger products to our ESOP clients, and the integration of strong talent from Ascensus will be essential to support the growth of our ESOP business.”
Commenting on the agreement, Ascensus president Nick Good said, “We have great respect for Principal, their expertise, and their commitment to serving their clients with excellence. We’re confident that the valued client relationships and associates transitioning through this transaction will benefit greatly from the leadership, capabilities, and continued investment Principal has in the ESOP marketplace.”
Perella Weinberg Partners served as financial advisor to Principal, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal counsel. Terms of the transaction are not being disclosed.
Empower names CCO
Empower announced that KC Waldron will join the company as chief compliance officer.
Waldron will oversee compliance activities for Empower, including the management and development of Empower’s compliance program. She will also ensure that the company’s compliance standards adhere to all applicable federal and state regulations and corporate policies.
“Doing the right thing and leading with integrity is how we have built our businesses and as we continue to grow, KC’s leadership will help enable new strategies for the benefit of Empower’s customers,” said Edmund F. Murphy, III, president and chief executive officer for Empower.
Waldron brings an extensive background in regulatory expertise. She was at Charles Schwab for 12 years, where she was most recently managing director, chief compliance officer of Schwab Wealth Advisory, Inc., and head of Wealth & Advice Solutions compliance.
“As a leading financial services provider, we must meet or exceed the expectations of our regulators. KC has spent her career supporting and protecting investors, which is always our most important consideration at Empower,” said John Bevacqua, executive vice president and chief risk officer.
Waldron joined Empower on May 7 and is reporting to Bevacqua.
Bevacqua noted that Waldron is an industry leader who has significant involvement with the Securities Industry and Financial Markets Association (SIFMA) and the Financial Industry Regulation Authority (FINRA), including providing frequent industry speaking engagements. She recently served on the FINRA Large Firm Advisory Committee, which advises FINRA regarding the effect of current and proposed securities rules and regulations.
“I knew Empower was the right company and culture for me because the most important company value is doing the right thing for customers,” said Waldron. “I look forward to this new opportunity and intend to support the company’s values as it grows.”
Prior to her most recent role at Schwab, Waldron was managing director, global head of Regulatory Strategy, Examinations & Inquiries where she managed the firm’s relationships with the SEC, FINRA, National Futures Association, Commodity Futures Trading Commission, state securities regulators, the exchanges, Financial Crimes Authority in the UK, Monetary Authority of Singapore, Securities & Futures Commission of Hong Kong and the Central Bank of Ireland.
Prior to her career with Schwab, Waldron held roles as an enforcement attorney with the United States Securities and Exchange Commission and a securities litigator with Morrison Foerster LLP.
Waldron holds a bachelor’s degree in business administration from Texas A&M University and holds a law degree from the University of Texas School of Law.
Alerus acquires HMN Financial
Alerus Financial Corporation and savings and loan holding company HMN Financial signed a definitive agreement and merger in which Alerus will acquire HMNF and the parent company of Home Federal Savings Bank.
Under the terms of the agreement, HMNF will merge with and into Alerus and Home Federal will merge with and into Alerus’ wholly-owned bank subsidiary, Alerus Financial National Association, in a transaction valued at approximately $116.4 million.
The merger will be the twenty-sixth acquisition for Alerus since 2000 as part of its long-term plan to continually expand its business segments, including banking, wealth services, and retirement and benefits plans and services. Upon completion of the Merger, the combined company will have approximately $5.5 billion in total assets, $3.7 billion in total loans and $4.3 billion in total deposits, assets under administration (AUA) and management (AUM) of approximately $43.1 billion, with 29 locations across the Midwest, as well as Arizona.
Founded in 1934, Home Federal operates 12 branches in Minnesota and one branch in each of Iowa and Wisconsin. As of March 31, 2024, HMNF had, on a consolidated basis, $1.2 billion in total assets, which included approximately $872.3 million in loans and $1.0 billion in total deposits.
Brad Krehbiel, president and chief executive officer of HMNF, said, “We believe we have found an exceptional partner in Alerus. They have a proven track record of diversification, profitable growth, and the ability to execute acquisitions. We are confident this merger will serve all our constituents well, including our stockholders, clients, employees, and communities.”
According to the agreement, stockholders of HMNF will receive 1.25 shares of Alerus common stock for each share of HMNF common stock they own, and the merger is expected to qualify as a tax-free reorganization for HMNF stockholders. Based on Alerus’ closing price of $20.69 as of May 14, 2024, the aggregate deal value is approximately $116.4 million, or $25.86 per share. Upon completion of the merger, one HMNF director will join the Alerus Board of Directors.
The transaction has been unanimously approved by the Boards of Directors of both companies. Completion of the Merger is subject to customary closing conditions, including receipt of required regulatory approvals and approval by the stockholders of both Alerus and HMNF. The transaction is expected to close in the fourth quarter of 2024.
Raymond James & Associates, Inc. served as financial advisor and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel to Alerus on the transaction. D.A. Davidson & Co. served as financial advisor and Ballard Spahr LLP served as legal counsel to HMNF.
Lincoln Financial appoints annuity solutions leader
Lincoln Financial Group announced that Brian Kroll will be appointed executive vice president, head of Retail Life and Annuity Solutions.
Kroll will report to chairman, president and CEO Ellen Cooper and will be a member of the company’s Senior Management Committee. He will be responsible for all aspects of the company’s Life Insurance and Annuity businesses, including product manufacturing, underwriting, new business, inforce operations and strategic planning.
“In our at-scale Life and Annuity businesses, we continue to focus on increasing profitable growth as we realign our product mix to achieve more stable cash flows and higher risk-adjusted returns,” said Cooper. “Brian has a proven track record in our industry and here at Lincoln, and his deep expertise and collaborative leadership style will add tremendous value as we take our core competitive advantages in product manufacturing and our differentiated customer service to the next level. As an industry veteran, Brian has been serving as an advisor to our senior management team as we have evolved our strategies in these two businesses, and we’re thrilled that he will officially rejoin the Lincoln team as we shift into execution.”
Kroll has more than 30 years of industry experience. Previously, he was at Lincoln for 18 years in various leadership roles, most recently leading the Annuity business until 2022. During his time at the company, Kroll had a track record of developing products with strong customer value propositions that delivered high risk-adjusted returns under varying market conditions. He spearheaded the launch of Lincoln’s registered index-linked annuity (RILA) product category and expanded its fixed indexed annuity offerings, and throughout his tenure, he served as a critical strategic partner to Lincoln’s Distribution organization.
Prior to Lincoln, Kroll held senior product management and actuarial roles across both life insurance and annuities at several large insurance companies, including MetLife, Manulife and SunLife. He has served on executive committees and advisory boards for the ACLI and LIMRA, as well as on the Corporate Advisory Council of the International Association of Black Actuaries. Additionally, in his past tenure at Lincoln, he was an executive sponsor of the company’s Latino Business Resource Group.
“I’m excited to return to this great organization to drive execution of the strategic realignment of Lincoln’s Life and Annuity businesses,” said Kroll. “I look forward to partnering with the leadership team as we focus on growing profitably across a balanced set of products with strong customer value propositions, which also meet the profitable growth objectives that support the company’s long-term value creation.”
The distribution of Lincoln’s Retail Life and Annuity Solutions products continues to be led by John Kennedy, EVP, chief distribution and brand officer, who reports directly to Ellen Cooper, reflecting the strategic importance of the role. Kennedy will partner closely with Kroll as he joins the organization.
Matt Grove, EVP was previously responsible for Lincoln’s wealth management and insurance solutions businesses. Grove will serve as an advisor for a period of time to ensure a smooth transition following the May 6, 2024 close of Lincoln’s wealth management transaction with Osaic, Inc.
SEE ALSO:
- Vanguard Names New CEO
- AllianceBernstein Expands Retirement Income Suite
- Pontera, Stifel Partner to Securely Manage Client 401(k)s
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.