New York Community Bancorp (NYB), FirstMerit (FMER) and BB&T (BBT) see lots of banks for sale but few worth buying, their top executives said during a banking conference in London this week.
New York Community President and Chief Executive Joseph Ficalora said Wednesday that the $43 billion-asset company has looked at "hundreds and hundreds" of potential acquisition targets, and while he remains confident that a large deal is out there, he is still waiting for the right one to come along. The Westbury-based company took over failed banks in 2009 and 2010 but otherwise has not made a whole-bank acquisition since 2007.
FirstMerit in Akron, Ohio, has been aggressively scoping acquisitions since last one in May 2010 for a failed Chicago bank, said Paul Greig, the president and CEO of the $14.7 billion-asset company.
"We've done full board due diligence on probably 30 or so companies in that two-year period of time," he said at the 2012 Barclays Americas Select Franchise Conference. "We have found many companies that have limited franchise value" that "we have had no interest in."
Some were priced too high but most were just not worth buying because they had too many high-cost deposits, brokered certificates of deposits or commercial real estate loans, Greig said.
FirstMerit is targeting banks with quality loans and low-funding costs, particularly in the highly-fragmented Chicago market. Greig said pricing expectations are falling but are still too high.
"We'll continue to be patient and disciplined" in considering deals, he said.
BB&T is expected to focus on bite-size deals in the near term as it focuses on completing two recently announced deals, Chief Financial Officer Daryl Bible said Tuesday.
In February, the Winston-Salem, N.C. company agreed to pay $570 million for the life, property and casualty insurance units of Crump Group of Roseland, N.J. The deal was its fourth — and by far its largest — for an insurance firm since September.
"It was a very large acquisition for us, so I would doubt that we would do anything significant in the insurance space this year [and] really focus more on into 2013 and 2014," Bible said.
On the banking side, BB&T's primary focus is closing its $300 million purchase of the banking operations of Fort Lauderdale, Fla.'s BankAtlantic Bancorp (BBX), but Bible said it would consider small, fill-in deals at "reasonable prices." The $175 billion-asset company is particularly interested in adding market share in Texas, where it has just two-dozen branches.
"There could be other smaller transactions down the road for our company," Bible said. "We really don't see anything large on the horizon today. People talk a lot about larger transactions, but right now I don't see anything out there even close to happening."
Ficalora is more bullish, and he is eager to strike another deal after agreeing in April to absorb $2.3 billion of deposits from Aurora Bank FSB, the one-time mortgage arm of Lehman Bros.
He said that with so many banks looking to find merger partners these days, New York Community is not really considering small deals.
"We have reason to believe there will be opportunities to do large deals in the market in the period ahead," Ficalora said.