Ken Thomas says City National Bank deal good for local businesses
Miami-based bank analyst and economist Kenneth H. Thomas
Miami-based bank analyst and economist Kenneth H. Thomas[5] said the deal by Banco de Credito e Inversiones[6] (BCI) to buy City National Bank of Florida[7] is good for local businesses because it maintains a competitor in the marketplace and should lead to the bank expanding.
It was announced on Friday that Spain’s Bankia would sell the Miami-based bank to BCI[8] for $882.8 million, which is about 1.5 times its book value. Thomas said that represents a new high water mark for bank acquisitions in Florida post recession and it should represent the ceiling for acquisition deals to follow.
“They paid the best price because they’re getting the best product,” Thomas said. “For other banks, if you sell for just book value you are doing well. Look at how many deals aren’t even close to book.”
However, Thomas noted that City National Bank sold for 4.5 to five times its book value in 2008 when it was acquired by the Spanish bank. The prices for banks have come down dramatically since the recession.
Now with the South Florida economy heating up, banks are increasing their lending. The fact that City National Bank is getting acquired by a bank without any branches in the United States is good news because the market isn’t losing a competitor, Thomas said. He noted that Branch Banking & Trust Co. closed many BankAtlantic branches following that deal in 2012 and that removed a major player for loans and deposits in South Florida. Had BB&T or Miami Lakes-based BankUnited succeeded in their bids for City National Bank, it’s possible there would be been more branch consolidation and less competition, Thomas said.
Brian Bandell covers banking, finance, health care and education. Get the latest banking industry news here.[9]
References
- ^ Brian Bandell (feeds.bizjournals.com)
- ^ This email address is being protected from spambots. You need JavaScript enabled to view it. (feeds.bizjournals.com)
- ^ LinkedIn (www.linkedin.com)
- ^ Twitter (twitter.com)
- ^ Kenneth H. Thomas (feeds.bizjournals.com)
- ^ Banco de Credito e Inversiones (www.bizjournals.com)
- ^ City National Bank of Florida (www.bizjournals.com)
- ^ sell the Miami-based bank to BCI (www.bizjournals.com)
- ^ Get the latest banking industry news here. (www.bizjournals.com)