The Geography of Banking M&A

Tallies of mergers and acquisitions activity tend to swing on a handful of giant transactions, and mapping the geography of deal announcements since the middle of last year is little different.

About a fifth of deposits in Wisconsin are set to change hands in Bank of Montreal's deal for Marshall & Ilsley Corp., making it the state with the largest turnover in the nation (see maps).

M&I's substantial positions in Missouri and Arizona also help rank those states among the most active.

Likewise, Hancock Holding Co.'s agreement to acquire Whitney Holding Corp. explains most of the churn in Louisiana. That state ranks second in terms of acquisition target deposits by branch location as a percentage of total state deposits at June 30, 2010. (June 30 is the date of the latest deposit survey by federal regulators.)

Excluding purchases of failed banks, Connecticut ranks fourth, mostly because of First Niagara Financial Group Inc.'s deal for NewAlliance Bancshares Inc.

Including deposits put in play because of failures, New Mexico ranks third with turnover of 7.6% because of the collapse of First Community Bank, whose operations were acquired by U.S. Bancorp in January.

In absolute terms, there has been a relatively large amount of turnover in states like Florida (about $8 billion in deposits because of deals and failures) and Texas (about $6 billion), but relatively little on a percentage basis because of their overall size.

(In total, deals for whole institutions announced since July 1, 2010, have encompassed about $100 billion of deposits, according to data from SNL Financial, and branch deals, which are not considered in the maps, encompassed about $2.2 billion of deposits. Banks that failed during the same period held about $30 billion of deposits, according to the Federal Deposit Insurance Corp.)

Wilmington Trust Corp., which has agreed to be sold to M&T Bank Corp., has about $6.5 billion of deposits in branches in Delaware, but that represents just 2.3% of state deposits. Because of branches operated by credit card companies and ING Group NV's U.S. online banking unit, total deposits in Delaware are far out of proportion with its population and economic output.

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