Despite an anticipated surge of transactions within the banking industry, bank merger and acquisition activity declined in 2011 compared to the prior year, hindered by a weak economic recovery, mounting regulatory pressures, and, according to some analysts, excessive seller expectations.
This article from the professionals of Mercer Capital reviews the M&A landscape for community banks in both 2011 and the 1st quarter of 2012.
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In addition, Mercer Capital has a wealth of transaction experience helping clients with mergers, acquisitions, recapitalizations and other substantial transactions.
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Monthly Economic Monitoring of Ukraine No.230, March 2024
Bank Merger & Acquisition Review: 2011 & Q1 2012 | Mercer Capital
1. Bank Merger &
Acquisition Review
For Year 2011 & Q1 2012
M&A Activity in 2011
Despite an anticipated surge of transactions within the banking industry, bank merger and acquisition activity declined in
2011 compared to the prior year, hindered by a weak economic recovery, mounting regulatory pressures, and, according
to some analysts, excessive seller expectations. Deal volume excluding government assisted transactions decreased
15.8% in 2011 from 2010 levels and approximated 2008 levels. It appears deal volumes bottomed out in 2009 at a total
of 104 for the year. Unfortunately, the number of transactions not reporting a deal value has increased in recent periods
(from 39 in 2009 to 51 in 2011), making a comparison of trends in deal values difficult. The number of deals presented
is exclusive of FDIC-assisted transactions, which decreased to 92 in 2011 from 157 during 2010.
Deal value (for those transactions which reported it) totaled $6.8 billion in 2011 versus $11.7 billion in the prior year.
Total deal value included PNC’s $3.5 billion acquisition of RBC Bank, which was announced in the second quarter of
2011, completed in the first quarter of 2012, and represented 51% of total reported deal value in 2011. Comerica’s $1.0
billion acquisition of Sterling Bancshares (announced in the first quarter and completed in the third quarter) accounted
for 15% of total deal value during the year.
Notably, total deal value for transactions in 2010 included several sizeable acquisitions, such as BMO’s purchase of
Marshall & Ilsley Corporation ($5.8 billion), Hancock Holding Company’s purchase of Whitney Holding Corporation
($1.8 billion), and First Niagara Financial Group’s purchase of NewAlliance Bancshares, Inc. ($1.5 billion). The
following table provides additional perspective with regard to transaction activity in the banking industry since 2006.
M&A: 2006-2011
2006 2007 2008 2009 2010 2011
Total Number of Deals (Excl. Gov’t Assisted) 234 243 128 104 177 123
Total Deal Value (Millions): * $74,126 $67,779 $28,408 $1,321 $11,987 $6,761
* Includes only those transactions for which deal value was reported
Transactions not reporting deal value 40 50 28 39 66 51
Period-to-Period Change 06-’07 07-’08 08-’09 09-’10 ‘10-’11
Number of Deals 3.8% -47.3% -18.8% 70.2% -30.5%
Mercer Capital’s ability to understand and Andrew K. Gibbs, CFA, CPA/ABV Jay D. Wilson, Jr., CFA
determine the value of a financial institution is 901.322.9726 901.322.9725
the cornerstone of the firm’s services and has gibbsa@mercercapital.com wilsonj@mercercapital.com
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