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Bank M&A: After the Honeymoon

What lies ahead for the top 10 bank marriages and engagements of 2012?

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(Source: KBW)
Short-Term Pain Short-Term Pain Buyer: M&T Bank (MTB)

Seller: Hudson City (HCBK)

Deal Value: $3.8B

Target's Assets: $44B

Announced/Completed: Aug. 27/ 2Q 2013 (est.)

M&T forecasts a "small negative impact" on net interest margins this year and $120 million in merger-related expenses, but 24% cost savings and "high single-digit" earnings accretion next year, CFO Rene Jones recently said.

Related Article: Hudson City Sale Bodes Ill for Mortgage Lenders Angling to Diversify
Long-Term Ambition Long-Term Ambition Buyer: UnionBanCal

Seller: Pacific Capital Bancorp (PCBC)

Deal Value: $1.5B

Target's Assets: $6B

Announced/Completed: March 9/Dec. 1

UnionBanCal spent heavily on its biggest deal in more than 15 years so it could expand along the coveted central coast of California, and it is widely viewed to be eyeing more acquisitions.

Related Articles: UnionBanCal's Earnings Fell in 4Q on Higher Spending

Union Bank to Close 15 Calif. Branches after Pacific Capital Deal
On the Defensive On the Defensive Buyer: FirstMerit (FMER)

Seller: Citizens Republic (CRBC)

Deal Value: $1.3B

Target's Assets: $10B

Announced/Completed: Sept. 12/ 2Q 2013(est.)

FirstMerit's stock is still off 9% since it announced the deal for the Michigan bank, but CEO Paul Greig has defended it as crucial to his goal of being a Midwestern powerhouse.

Related Articles: FirstMerit Chief Takes on Skeptics of Citizens Republic Deal

Why FirstMerit Avoided the Chicago Way, and What It Says About M&A

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Say Yes to Texas Say Yes to Texas BUYER: Hilltop Holdings (HTH)

SELLER: PlainsCapital

DEAL VALUE: $641M

TARGET'S ASSETS: $6B

ANNOUNCED/COMPLETED: May 8/Nov. 30

Gerald Ford, the head of Hilltop in Texas, announced the PlainsCapital agreement shortly after cashing in on the Pacific Capital sale and made it clear that he plans more deals.

Related Article: Group Led by Gerald Ford to Buy PlainsCapital in Texas for $520 Million

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Texas Cocktails, Okie Chaser Texas Cocktails, Okie Chaser BUYER: Prosperity Bancshares (PB)

SELLER: American State Financial

DEAL VALUE: $529M

TARGET'S ASSETS: $3B

ANNOUNCED/COMPLETED: Jan. 12/July 1

Prosperity CEO David Zalman bought American State and four other Texas banks in 2012 and has turned his sights on Oklahoma, where the deals are more affordable.

Related Articles: Prosperity in Houston to Buy Coppermark for $194M, Enter Oklahoma

What This Bank Buyer Wants: Loans, and Deposits and ROE

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Moving Into the Fast Lane Moving Into the Fast Lane BUYER: Columbia Banking System (COLB)

SELLER: West Coast Bancorp (WCBO)

DEAL VALUE: $509M

TARGET'S ASSETS: $2.4B

ANNOUNCED/COMPLETED: Sept. 25/late April (est.)

West Coast's private-equity investors get a chance to exit a bank they helped turn around, or roll some of their money into a fast-growing player in the Pacific Northwest led by Melanie Dressel.

Related Articles: Don't Be Fooled by the Modest Price for West Coast Bancorp

Failed-Bank Deals Fuel Rapid Growth at Columbia State
Great Expectations Great Expectations BUYER: Oriental Financial (OFG)

SELLER: BBVA's Puerto Rico operations

DEAL VALUE: $500M

ASSETS: $5.2B

ANNOUNCED/COMPLETED: June 28/Dec. 18

Oriental Financial's stock is 43% higher than the day before announcement of the deal, which makes it the No. 3 player on the island. Post-merger profits are expected to replenish capital in two years.

Related Articles: Puerto Rican Deal Provides Rare Chance for a Bank Makeover

Oriental Prices $24M Preferred Stock Offering
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More to Come More to Come BUYER: Investors Bancorp (ISBC)

SELLER: Roma Financial (ROMA)

DEAL VALUE: $459M

TARGET'S ASSETS: $1.8B

ANNOUNCED/COMPLETED: Dec. 19/ 2q 2013.

Investors CEO Kevin Cummings plans a second-step conversion this year but is expected first to pursue more mutual thrifts like Roma to further strengthen its standing in New York and New Jersey.

Related Article: Should Investors Buy More Mutuals or Stop with Roma?
Encore! Encore! Encore! Encore! BUYER: Cadence Bancorp

SELLER: Encore Bancshares (EBTX)

DEAL VALUE: $251M

TARGETS' ASSETS: $1.5B

ANNOUNCED/COMPLETED: March 5/July 2

Cadence paid a steep premium to land a healthy Texas bank, and is expected to make more deals, but CEO Paul Murphy Jr. says that sometimes it's cheaper to recruit successful bankers than buy their bank.

Related Articles: Bankers Consider Hiring as an Alternative to Acquisitions

Encore's Impressive Premium Gives Sellers Leverage in Texas
West Coast Pac-Man West Coast Pac-Man BUYER: PacWest (PACW)

SELLER: First California Financial Group (FCAL)

DEAL VALUE: $235M

TARGETS' ASSETS: $2B

ANNOUNCED/COMPLETED: Nov. 6/ March 31 (est.)

PacWest CEO Matt Wagner aggressively pursued First California in Westlake Village and American Perspective Bank in San Luis Obispo, and he is expected to go for more.

Related Articles: PacWest's Moves Raise Specter of Hardball Bank M&A

Acquisitions Lift 4Q Profit at PacWest in Los Angeles

What lies ahead for the top 10 bank marriages and engagements of 2012?

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Posted by byelsxei i | Wednesday, March 20 2013 at 4:37PM ET
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