Pace of Bank M&A Activity Slowed in 3Q: KBW

The pace of bank M&A deals slowed in the third quarter and was flat through the first nine months of this year.

The banking industry announced 62 deals from July 1 to Sept. 30, compared with 73 in the second quarter and 68 a year earlier, according to data compiled by Keefe, Bruyette & Woods. The aggregate value of the those deals — nearly $3.7 billion — doubled that of the second quarter but fell 36% from a year earlier.

Overall, consolidation in 2015 is on pace to wind up relatively flat compared with a year earlier. The number of deals through Sept. 30 was virtually unchanged — 202 this year versus 203 in 2014— though the aggregate value of acquisitions is up 17%, at $13.8 billion.

Royal Bank of Canada's pending $5.3 billion purchase of City National in Los Angeles has accounted for nearly 40% of this year's deal values. Most other mergers have been relatively small.

Premiums have changed very little in recent quarters. The third quarter's average premium of 138% of tangible book value represented a slight increase from 136% in the second quarter and 127% a year earlier. Those premiums were 101% at the end of 2011.

The biggest deal announced during the third quarter was BB&T's agreement to buy National Penn Bancshares in Boyertown, Pa., for $1.8 billion. Only two other whole-bank deals were valued at more than $100 million: Metro Bancorp's proposed sale to F.N.B. Corp. and Baylake's pending sale to Nicolet Bankshares.