Slideshow Regulators Get Tough on Bank M&A

Published
  • August 26 2014, 10:21am EDT
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Federal regulators have delayed or derailed several bank mergers and acquisitions in recent months. Here are some notable examples.

(Image: iStock)


M&T and Hudson City

M&T Bank agreed to buy Hudson City Bancorp two years ago, but the deal has been on hold as the Buffalo, N.Y., buyer undergoes a $180 million, two-year overhaul of its compliance with the Bank Secrecy Act and related requirements. M&T, led by Robert Wilmers, still hopes to complete the deal this year.

(Image: Bloomberg)

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BancorpSouth and Community Central/Ouachita

BancorpSouth and Community Central/OuachitaBancorpSouth, led by Dan Rollins, withdrew applications to buy Central Community Corp. in Texas and Ouachita Bancshares in Louisiana in August after the Federal Reserve said it would not approve the deals. BancorpSouth, which hopes to refile, is dealing with Federal Deposit Insurance Corp. concerns over its BSA compliance.

Cullen/Frost and WNB Bancshares

Cullen/Frost Bankers was fortunate. Regulators approved its purchase of WNB Bancshares, but they made it clear that the Texas company would need to improve compliance with fair-lending laws before seeking approval for future deals. Cullen/Frost CEO Dick Evans called the decision a "reasonable request."

Customers Bancorp and CMS Bancorp

Customers Bancorp, led by Jay Sidhu, was unable to buy CMS Bancorp due to regulatory delays. The companies, which did not say what exactly had concerned regulators, are now squabbling over a $1 million breakup fee.

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Banc of California and Popular Branches

Banc of California, an aggressive acquirer led by Steven Sugarman, has met resistance from advocacy groups as it tries to buy all of Popular's branches in Southern California. The Office of the Comptroller of the Currency established an additional 30-day comment period after certain groups complained about Banc of California's Community Reinvestment Act record.

MB Financial and Taylor Capital

MB Financial had to wait on regulatory approval to buy Taylor Capital after the seller was hit with a cease-and-desist order for using deceptive trade practices. MB, led by Mitchell Feiger, recently completed the acquisition.

Cascade Bancorp and Home Federal

Cascade, led by Terry Zink, swooped in and offered more money to buy Home Federal after Banner Corp. had already agreed to buy the Idaho company. Cascade's purchase was briefly delayed after the Securities and Exchange Commission raised concerns about the deal's tax consequences.

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Republic Bancorp and H&R Block Bank

Republic Bancorp and CEO Steve Trager had hoped that a deal to buy H&R Block's bank would help its own tax refund business. But regulators apparently objected to the effort to combine banking and tax-refund processing, and the parties called off the deal. H&R Block later agreed to sell its deposits and certain assets to BofI Holding.