A crowded field of Southeastern banks pushing $10 billion in assets could reshape the region in the near future.

South State in Columbia, S.C.; Simmons First National in Pine Bluff, Ark.; and Renasant in Tupelo, Miss., were able to take advantage of the financial crisis by buying failed institutions, while others scooped up struggling institutions.

At least a dozen banks from Arkansas to Virginia are nearing $10 billion assets, where they will face higher compliance costs tied to mandatory stress testing, along with caps on interchange fees.

This new class of banks will need to leap, rather than crawl, over that threshold, which could mean a spike in acquisitions over the next year or so, industry experts said. While the possibility of a major merger that could create a $20 billion-asset regional exists, management teams would need to address issues such as succession in order for that to happen.

"There's an entirely new group of companies that have emerged as the premier banks in the Southeast," said Lee Burrows, the chief executive of Banks Street Partners, an investment bank in Atlanta.

"A lot of these banks are high-quality financial institutions operating in superior markets," Burrows added. "All of these are evaluating opportunities for acquisitions and evaluating one another."

The Southeast has a high concentration of banks with assets of $7 billion to $10 billion. The region accounts for up about a third of nation's banks in that range, based on data from the Federal Deposit Insurance Corp.

Many of those institutions remained relatively strong during the financial crisis or were backed by private equity, which allowed them to buy failed or distressed banks. In the FDIC's Atlanta region 171 banks failed from 2008 to 2013, including 87 in Georgia and 70 in Florida.

"The Southeast dominated the failure market," Randy Dennis, president of DD&F Consulting, said. "People who had the fire in their belly and a good operation were able to take advantage of that."

The $8.6 billion-asset South State, for instance, bought six banks, including three failed institutions, from 2010 to 2013. The company has since taken a pause in bank acquisitions, though it recently bought 13 branches from Bank of America. Management now has to decide how it will handle the $10 billion-asset threshold.

"I think for most bankers their preference would be to have an acquisition instead of tiptoeing over it," said Peyton Green, an analyst at Piper Jaffray. "But really you have to plan for either because you don't know if the right acquisition will come along."

It's likely that the Southeast will end up with more banks with $15 billion to $25 billion in assets due to consolidation, said Christopher Marinac, an analyst at FIG Partners. Acquirers will look to gain size, efficiencies and access to strong metropolitan markets, said Steven Dunlevie, who chairs the financial institutions team at Womble Carlyle Sandridge & Rice.

"Everyone's looking at everyone," Dunlevie said. "There are a lot of conversations going on."

M&A activity should spike this year and 2017 as larger community banks increasingly inch closer to $10 billion in assets. Absent a big deal, those institutions will incur great "cost at no real benefit," Burrows said. "None will want to play a shrinking game as they approach that threshold."

Still, shrinking could be a short-term option as banks weigh their options.

Capital Bank Financial, which will reach $9.9 billion in assets after it closes its deal for CommunityOne Bancorp in Charlotte, N.C., has said it could shed lower-yielded loans and securities until it finds the right opportunity. Doing so could also help the company improve its return on assets, Chief Financial Officer Chris Marshall said during a conference call last year.

South State, meanwhile, sold off $7 million in loans as part of recent branch dispositions, though the company also posted 9% year-over-year loan growth in the fourth quarter.

South State is generating a lot of chatter among bankers and industry observers, given its acquisitive history and lengthy break from large-scale consolidation.

Robert Hill Jr., South State's chief executive, told analysts during a fourth-quarter earnings call that, while the company is "seeing a lot of opportunities," it is being "very deliberate" with its M&A activity. "We have a very defined M&A strategic plan, and we live by that plan," he said.

South State could merge with an institution like the $7.3 billion-asset Yadkin Financial in Raleigh, N.C., to catapult over the $10 billion-asset threshold in a way that would provide a meaningful presence across North Carolina, industry experts said.

Representatives for South State and Yadkin declined to comment.

Another option for South State could be an in-market deal that would provide more opportunity to cut costs. Such an acquisition would align well with management's historical preference for growing share in existing markets, industry experts said.

"They would have to get good management talent to make them do something in an adjacent market," Green said.

A key hurdle for South State and other growing Southeastern banks is the perceptions of being a buyer or a seller. Most of those institutions bulked up through acquisitions, so their executives may not view themselves as sellers.

As a result, consolidation could hinge on the need for growth and access to capital, said Tony Plath, a finance professor at the University of North Carolina at Charlotte. "There are still too many of those small regionals approaching $10 billion of assets," he said.

"The business has become much more scale-orientated, and the need to be larger is more imperative than it was in the last 10 years," Plath said.

Banks will weigh those needs against finding the right acquisition target, industry observers said. The management team at South State, for instance, is "very disciplined in how they think about pricing and fit," Green said.

"What's interesting to me is the South State team has a comfortable position of doing nothing," Marinac said. "They look at the world as they want to make money, but do it right. They don't feel in a hurry to jump ship to other states."

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