Mar. 4, 2014, 10:47 AM
- The fast pace of smaller bank roll-ups looks set to take a pause as acquirers shy away from higher prices and instead focus on integrating recent purchases. Deal prices this year have climbed to an average of 136.8% of TBV vs. 128.7% in 2013 and 120.3% in 2012, according to SNL Financial.
- Of course, higher stock prices make it easier to pay, with SNL's Bank & Thrift Index now trading near 170% of TBV from 145% about a year earlier.
- Speaking at a recent conference, BankUnited (BKU +1.9%)CEO John Kanas says a strong currency is of little use if the target bank can't grow its business at the same multiple as his bank. Further, any buyer should be prepared to spend a year distracted with regulators.
- Still on the hunt, Home BancShares (HOMB +3.3%) CEO Randy Sims takes note of frothy seller expectations, noting a number of deals where the seller has baked in 50% growth into its asking price.
- Hancock Holdings (HBHC +3.1%) chief Carl Chaney agrees prices are rising, but so too is the quality of the books he's looking at.
- Trustmark (TRMK +3.7%) CEO Gerard Host says growth is necessary now that the bank's passed $10B in assets and faces a whole host of new regulations and costs. "We're going to have to pay to do the deals we want to do ... It's not just about money."
- Old National Bancorp (ONB +2.5%) CEO Bob Jones says he spends nearly 20% of his time talking to CEOs and boards of potential targets and these things take time. The recently closed purchase of Tower Financial, he says, was 10 years in the making.
- Also presenting: BXS, FFCH, UBSH, PB
Jun. 26, 2013, 12:46 PM
There's more consolidation in the community bank sector where Home BancShares (HOMB +11.2%) agrees to buy Liberty Bank of Arkansas for $250M in Home common stock and $30M in cash. The deal is expected to close in about 3 months. Goldman and RayJay chime in with upgrades on Home to Buy from Hold.| Jun. 26, 2013, 12:46 PM | 1 Comment