PE Investment in Commercial Banking Almost Doubled in 2010

by: Research Recap

Private equity is stepping up its investment in regional banks. PE investors have invested in 85 commercial banks since the beginning of 2008, according to PitchBook. While many of those investments (42%) were buyouts, almost a third (30.7%) were PIPE investments as PE firms work with bank investment restrictions.

Deal activity in the Commercial Bank industry exploded in 2010 almost doubling 2009’s total with 44 completed deals.

In just 2010 alone, 38 PE investors invested in the industry, 15 of which returned to the industry to make at least one more investment during the same year. The most active investor was Stone Point Capital with 6 deals, followed by Friedman Fleischer & Lowe and Patriot Financial Partners with 5 apiece.

In the most recent deal Warburg Pincus invested $86.7 million in National Penn Bancshares (NPBC) as part of a total $150 million investment. In the final investment, Warburg Pincus purchased about 14.3 million shares of common stock for $6.05 per share. The initial investment of $63.3 million was provided back in October. Warburg Pincus now holds a 16.4% stake in National Penn.