Top bank M&A deals of 2017

Bank M&A started off 2017 with a bang, with eight of the year’s 10 biggest deals taking place in the first six months. Volume picked up after that, mostly due to smaller mergers.

The total number of deals announced in 2017 has topped the prior year by about 6%, with 252 acquisitions, based on data from Keefe, Bruyette & Woods and S&P Global Market Intelligence. Average deal sizes and premiums also rose, generating some optimism among industry experts that momentum could continue into 2018.

“The environment right now trends toward [more] banks getting together,” Jonathan Hightower, a lawyer at Bryan Cave in Atlanta, said earlier this month. “We have a lot of different complimentary strengths across the banking landscape right now.”

North Carolina, where many local banks were backed by private equity after the financial crisis, was a hot market for consolidation. Three of the year’s biggest acquisitions involved sellers in the Tarheel State as out-of-state buyers were drawn to a growing population and ample opportunities for commercial lending. North Carolina has lost more than a third of its banks since the end of 2010.

Florida accounted for three of the other top deals, with each of those acquisitions having buyers that were based outside the state. The Sunshine State is well-known for boom-and-bust cycles that have tripped up banks unfamiliar with these risks in the past.

Sellers in California, Indiana, New York and Virginia accounted for the other big deals.

Here is a breakdown of the biggest bank acquisitions of 2017.

BUYER: Sterling Bancorp
SELLER: Astoria Financial
DEAL VALUE: $2.2 billion
ANNOUNCED: March 7
STATUS: Completed in October

Jack Kopnisky, the president and CEO of Sterling Bancorp in Montebello, N.Y., accomplished what New York Community Bancorp failed to do when he bought Astoria Financial in Lake Success, N.Y., for $2.2 billion. Astoria had agreed to be sold to New York Community, but that transaction fell apart for unknown reasons, though some have speculated that regulatory delays may have been tied to commercial real estate concentrations or that the deal would have made New York Community a systemically important financial institution. This year’s biggest bank acquisition nearly doubled Sterling's size to $31 billion of assets. The company also gained low-cost deposits and a large presence on Long Island.

BUYER: First Horizon Financial
SELLER: Capital Bank Financial
DEAL VALUE: $2.2 billion
ANNOUNCED: May 4
STATUS: Completed in November

First Horizon, led by Chairman and CEO Bryan Jordan, had gone more than two years without a whole-bank deal when it agreed to buy Capital Bank in Charlotte, N.C. It was the largest acquisition in the Memphis, Tenn., company’s history. Management at the $40 billion-asset First Horizon is optimistic about the deal, recently increasing cost-cutting expectations.