Rainier Pacific Financial (RPFG), under the gun from regulators to raise new capital, confirms that bank investors aren’t interested in doing deals without help from the feds:
But a rescue . . . is unlikely, the company said in unusually candid terms.
"Given the generally soft current market conditions for bank mergers and acquisitions, and the desire for FDIC-assisted transactions by many acquirers, it is unlikely that the company's efforts to meet the recapitalization requirements ... will be successful prior to any further or more severe actions that the company's and the bank's regulators may take, including the assumption of control of the bank to protect the interests of the depositors insured by the FDIC."
Victor Toy, senior vice president and secretary at Rainier Pacific, said the company wasn't predicting an FDIC takeover: "We're just stating factual information to investors and others, that conditions for capital raising are challenging in the extreme." [Emph. added]
No FDIC help, no deal! This is, of course, the same message that came out of the SNL banking M&A conference in New York last month. Would-be buyers of Rainier might acquire the company at an attractive price right now. But if they wait for the FDIC to sweep in, they figure to own it at an even better price, and at lower risk. Flaws in that reasoning not immediately apparent. . . . In meantime, Rainier appears to be toast. . . .