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If you can't beat 'em, buy 'em
Banks and nonbanks are typically foes, but banks made 34 nonbank M&A deals through mid-May, emerging as buyers in two-thirds of them. Many buyers are eager to pad fee income by adding investment, specialty finance or insurance firms; sellers are typically looking to cut costs. Here is a roundup of such deals this year.
Breaking the deals down
Most of the deals so far have involved securities and investments businesses, which accounted for 35% of the activity. Specialty finance firms traded hands in a third of the transactions, while insurance agencies made up a quarter of the deals. A handful of deals involved fintech-related businesses.
a pie chart showing the breakdown and details for an investment portfolio
Securities and investments
A dozen nonbank deals have involved securities firms. Several banks are stepping back, including UMB Financial in Kansas City, Mo., which is selling Scout Investments to Raymond James, and Triumph Bancorp in Dallas, which is selling Triumph Capital Advisors to an investment group. Fifth Third Bancorp in Cincinnati is a notable acquirer, agreeing in January to buy Retirement Corp. of America.
Close up of credit cards forming background
Specialty finance
Ten companies and one portfolio, in areas such as mortgages and credit cards, are being dealt. PNC Financial in Pittsburgh agreed in February to pay nearly $1.3 million for C&V Business in a deal that includes franchise and technology loans. Bank of America agreed to sell its foreign credit card business while Banc of California sold its mortgage operation in a cost-cutting move.
Insurance on Red Button Enter on Black Computer Keyboard.
Insurance brokerage
Insurance agencies are always popular buys. Banks such as Fifth Third, Eastern Bank and Bryn Mawr Bank have agreed to acquire seven brokerage firms so far this year. Wells Fargo is the only seller; it is planning to sell Cameron M. Harris & Co. to USI Insurance Services.
Financial Technology concept on the gearwheels, 3D rendering
While most banks have opted to partner with fintech firms, a smattering of deals have taken place. Customers Bancorp in Wyomissing, Pa., is selling its BankMobile business to Flagship Community Bank in Clearwater, Fla. State Street, meanwhile, is selling its 50% stake in Boston Financial Data Services to DST Systems.