Bank M&A in 2019: Pace up, premiums down
There were more bank M&A announcements through the first 10 months of this year compared with the same period in 2018, but excluding the largest merger agreement of the year — BB&T-SunTrust — deal values and multiples are shrinking.
Banks announced 231 deals through Nov. 1, a 4% increase from a year earlier, according to data compiled by Compass Point, Keefe, Bruyette & Woods and S&P Global Market Intelligence. A flurry of activity in September and October contributed to the increase.
Aggregate deal value is another story. Excluding BB&T’s $28.1 billion agreement to buy SunTrust, a combined $21.2 billion in deals have been announced this year — 19% lower than at the same point last year. Less than 10% of the deals announced this year have involved sellers with more than $1 billion in assets.
Premiums have fallen, too. They averaged 155% of a seller’s tangible book value through Nov. 1, compared with a 174% average in the same period of 2018.
Here is a look at some recent transactions, many of which fit the profile of relatively small, less expensive agreements.