Bank M&A activity slow but increase predicted
Kevin Cummings, CEO of Investors Bancorp in Short Hills. N.J., who announced the only merger or acquisition involving a local bank this year when it said in April it planned to acquire Sewell, N.J.-based Gateway Community Financial Corp.
Bank merger and acquisition activity in 2013 is still behind last year’s pace both nationally and locally, according to data from SNL Financial.
Through the first eight months of the year, there were 134 announced deals, which is on pace for slightly more than 200 for the year. That is below the 236 deals in 2012 but above the 149 in 2011 and 179 in 2010.
Mark McCollom[6], an investment banker with Griffin Financial Group, pulled out the mid-Atlantic region — defined for these purposes as banks in New York, New Jersey, Pennsylvania, Delaware and Maryland
McCollom said there were 18 deals in 2011, 23 in 2012 and 11 in the first two thirds of 2013. The median price-to-tangible book value for those 2013 deals was 120 percent, up slightly from 118 percent in 2012 but below the 125 percent in 2011.
But there was only one announced deal involving a bank located in the Philadelphia region. In April, Sewell, N.J.-based Gateway Community Financial Corp., parent to GCF Bank, agreed to be acquired by the much larger Investors Bancorp of Short Hills, N.J. This at a time when the American Banker singled out Pennsylvania as a hot market for M&A activity.
McCollom said the good news is that most buyers saw their currency improve. But concerns over waiting for the final guidelines for Basel 3— the global regulatory standard on bank capital adequacy, stress testing and market liquidity risk— caused concerns about possible returns in transactions. But with Basel 3 now finalized, McCollom said pre-merger activity is at its highest levels since the recession began. That includes meeting with other bank CEOs and working with investment bankers on deal models.
Banking, Insurance, Law