Bank M&A Round-up

I’m still getting settled back in chilly Tennessee (23 degrees and icy!) and can’t help to take a fond look back at sunny Phoenix, Arizona, where just last week Bank Director wrapped its 20th annual Acquire or Be Acquired Conference.

Obviously, at a conference called “Acquire or Be Acquired”, a lot of discussion centered on buying and selling a bank. As our 2014 Bank M&A Survey with Crowe Horwath LLP found last March, pricing is still a concern, with 63 percent of potential buyers saying that pricing expectations are still too high. Underscoring that point, 35 percent say that coming to an agreement on price is the single greatest challenge in M&A:

2014 MA Survey Challenges q12

The focus in Arizona wasn’t entirely on M&A. Speakers from the investment side — specifically, Curtis Carpenter of Sheshunoff & Co., John Duffy of Keefe Bruyette & Woods, a Stifel Company, and Stifel Financial Corp.’s Ben Plotkin — focused on issues of size, scale and profitability. I explored what they had to say about size HERE for BankDirector.com.

If you’re interested in highlights from the event, Bank Director Editor Jack Milligan and Bank Director President Al Dominick are featured in this series of brief videos:

The banking industry is more profitable, with banks between $2 billion and $10 billion in assets primed to be active acquirers.

The demographics of America are changing, and bankers need to pay attention to the customer of the future.

Consolidation will pick up, with the industry shrinking to fewer than 5,000 banks in the next 5 years.

Acquirers still face regulatory challenges in getting the deal done.

You’ll find more from Al over at About That Ratio, while Jack Milligan just unveiled his new blog last month, The Bank Spot.

All in all, the mood in Arizona was brighter — and I don’t think it was just the warm weather. Banks are getting stronger, and deal activity should pick up as some banks (many between $1 billion and $10 billion in assets) are primed to gain scale and expand their market through acquisition in 2014.

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