Every deal tells a story: sometimes it is about a banker who is just plain tired, and other times it might be about a banker hungry for growth. Occasionally it's both.

Though every deal involves unique elements, nearly all of them fall into a handful of patterns based on their asset sizes, the kind of market they operate in, their lines of business and other factors.

Putting aside the endless predictions about how many deals will occur next year — like this year, the bank M&A pace will probably increase somewhat, but not go gangbusters — American Banker queried a number of dealmakers and lawyers about the kinds of deals they anticipate next year. Drawing from those conversations, here are six catchy categories to sharpen your outlook for 2013 and simplify a complex market.

The Kansas Way
Kansas emerged as a consolidation capital in the last couple of years. Since January 2011, there have been 16 transactions involving banks with less than $100 million in assets. The median return on assets for the sellers was 0.29% and the median nonperforming asset ratio was 1.07%, according to Wesley A. Brown, a managing director at St. Charles Capital in Denver.

"These are deals driven by the seller," Brown says. "These are basically clean banks that just can't survive in the current regulatory environment."

He adds that there could be other reasons, too, like a lack of succession planning or a need for liquidity. Either way, Brown says, deals driven by the seller won't just be in Kansas anymore.

Small Fish Needs Rescue
Bright lights, big city? More like fierce competition and expensive rent. While community banks across the country are agonizing over expenses, those in metropolitan areas are feeling the crunch the hardest, advisors say.

"It is hard to justify being a small bank in a large metro area," says C.K. Lee, a managing director at Commerce Street Capital in Dallas. "Cost of labor is high, branch property is high."

Constraints on lending also hold back smaller banks in bigger metro areas.

"If you have $10 million of capital, your in-house lending limit might be $800,000," Lee says. In a competitive landscape, "that shuts them out of the market."

The $390 million-asset HPK Financial, which sold itself to the $17 billion-asset Wintrust Financial (WTFC) in Chicago, and the $40 million-asset The Bank Arlington in Texas, which sold itself to Prosperity Bancshares (PB), are good examples. Both said they could better serve customers by pairing with a larger, stronger institution.

Private Equity Gets Antsy
Private equity saw a golden opportunity in the banking sector at the onset of the downturn, but it proved harder to seize than most anticipated. For many, 2013 will be the third or fourth year into their bank investments. This is the time to deploy any remaining capital before looking to cash out, since most of those pools have a five- to seven-year investment horizon. They are looking at all types of transactions — perhaps a healthy bank in one market and a distressed institution in another.

"They've already raised or committed the capital," Brown says.

Strategic Growth Bancorp in El Paso, Texas is one example, Brown says. In the fourth quarter, it announced the acquisition of a healthy bank in New Mexico and acquired a deeply troubled bank in Colorado in a bankruptcy court auction. A father and son, Bill and Pablo Sanders, formed Strategic in 2009. The pair raised $250 million in capital and acquired an El Paso bank in 2010 and a bank in Las Cruces, N.M., this year, local press reports say.

Unite and Conquer
The days of banks selling for multiples of their book value are largely over, and 2013 might be a year filled with "no- to low-premium" deals, says Bill Hickey, principal and co-head of Sandler O'Neill's investment banking group.

"It is the hardest kind of deal to do. Historically, it was called the merger of equals," Hickey says. "But it is basically taking two companies who know each other, respect each other, but decide it is better to double their size versus competing against each other."

The deals make sense because of the cost savings and the ability to quickly gain scale, but are difficult because boards have been engineered to see a sale as a big payout, not a pairing of like-minded companies.

Executives of the $624 million-asset Old Florida Bancshares in Orlando cited the opportunity for scale when it announced it would acquire the $455 million-asset New Traditions Bank for $45 million in stock. That deal positions Old Florida as the largest community bank in Orlando.

Corralling One-Trick Ponies
Two of the hard lessons that bankers learned from the economic downturn were stick to what they know and limit their concentrations. But niche players who rely on one business are too vulnerable. They will need to diversify or sell.

"There are banks that are realizing that their business model might not be optimal, but what can you do?" Hickey says. "The regulators are promoting diversification."

The good news is that one bank's concentration problem can be another bank's diversification strategy.

Examples include M&T Bank's (MTB) acquisition of Hudson City Bancorp, which was struggling to diversify away from mortgages, and Sterling Financial's (STSA) acquisition of American Heritage Holdings, which was facing pressure from regulators to change its heavy concentration in loans backed by the Small Business Administration.

The Chapter 11 Leap
Creativity has been the hallmark of successful deals in recent years. That will continue in 2013, advisors say. One of the unusual approaches could be a bank sale overseen by a bankruptcy court. The method, which puts a typically insolvent and debt-heavy holding company into bankruptcy, has been tossed around for the last few years, but the saving of AmericanWest Bank in 2010 by SKBHC Holdings was the primary example until the fourth quarter when First Place Bank, Mile High Banks and Premier Bank were sold to other banks in separate court auctions.

Advisors are divided about how often the method will be used. Hickey is skeptical. But Ernest Panasci, a partner at Jones & Keller in Denver, who was involved in the Mile High deal, says that nearly 150 banks nationwide fit the profile for a Chapter 11 sale.

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