Banks' M&A Radar: What's On, What's Off
July 31, 2013 8:00 AM
Leaders of midsize banks were generally more enthusiastic about M&A than larger ones during second-quarter calls and other discussions, but the deal-minded have very specific kinds of targets in mind.
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Swagger Is Back
BB&T (BBT) looked to be out of the M&A game for awhile when the Federal Reserve rejected its capital plan in March, but CEO Kelly King recently said that "I would be surprised if you don't begin to see acquisitions as we head through 2014."
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Not Us
PNC Financial Services Group (PNC) executives preached a stay-the-course approach that eschews more M&A, and CEO Bill Demchak denied any interest in Citizens Financial Group, which Royal Bank of Scotland has put on the block.
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Processor-Oriented
U.S. Bancorp (USB) CEO Richard Davis' interest in buying a traditional bank "couldn't be more dormant," he says, but "we will talk to anybody" who wants to sell a payments company, even a startup.
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Selective Taste
KeyCorp (KEY) -- which is selling its Victory Capital Management unit and buying a large CMBS servicer from Bank of America (BAC) -- will limit itself to deals that "are additive to our business model ... [and] our client-relationship philosophy," CEO Beth Mooney says.
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Back to the Future?
Synovus Financial (SNV), a onetime serial acquirer that recently repaid its Troubled Asset Relief Program funds, will return to making acquisitions eventually, CEO Kesel Stelling says.
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The Price of Demand
Bank of the Ozarks (OZRK) in Little Rock, Ark., is "actively working" on deals, but its show of interest "may create some pricing pressure that may cost us some deals we might otherwise have gotten done," CEO George Gleason says.
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Wait for Me
Cathay General (CATY) in Los Angeles is looking to jump into the consolidation frenzy in the Korean-American bank market. Acquisitions are its "first preference" for spending its excess capital (once it repays Tarp), Chief Financial Officer Heng Chen says.
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Sticking Close to Home
"The most effective M&A transaction for us will be the one
where we have significant overlap so that we can be assured of significant cost takeouts," Philip Flynn, CEO of Associated Banc-Corp (ASBC) in Green Bay, Wis., says.
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No Rush
FirstMerit (FMER) in Akron, Ohio, sees no need to pursue another deal in Chicago anytime soon even though MB Financial's (MBFI) deal for Taylor Capital (TAYC) has fueled M&A speculation, CEO Paul Greig says.
Eyes Wide Open
First Midwest in Itasca, Ill., wants to be a buyer but how soon is uncertain. "There are a lot of conversations going on, but there has always been a lot of conversations," CEO Mike Scudder says.
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