Bank M&A

2015 Bank M&A Survey: Plenty of Buyers – but Too Few Sellers?

11-14-14-MandA.jpgThere’s no shortage of financial institutions seeking an acquisition in 2015, but fewer banks plan to sell than last year, according to the bank CEOs, senior officers and board members who completed Bank Director’s 2015 Bank M&A Survey, sponsored by Crowe Horwath LLP. Forty-seven percent of survey respondents reveal that they plan to purchase a healthy bank within the next 12 months, compared to a mere 3 percent who plan to sell their bank.

Are some bank boards and management just waiting for the right deal? Seventy-one percent would consider selling the bank if they received an attractive offer. As bank valuations rise, potential sellers express a growing desire for stock in return for selling the bank—often combined with cash.

There may be fewer fish in the sea—at least not enough to satisfy the appetites of growth-hungry banks—but the survey reveals several positive trends for the industry. Of the two-thirds of respondents who see a more favorable M&A environment, 55 percent cite improved credit quality and 48 percent improved stock valuations. And despite the challenges of a highly competitive growth environment and costly regulations, 64 percent of respondents expect their bank to thrive as an independent entity. Absent a compelling deal, bank leaders express a preference for self-determination: When asked about barriers to selling the bank, more than two-thirds say that the board and/or management want the organization to remain independent.

More than 200 directors and senior executives of banks nationwide responded to the survey, which was conducted by email in September.

Key Findings:

  • Credit quality’s adverse impact on deal-making is lessened in the minds of respondents. A little more than one-third of respondents say that concerns about the asset quality of potential targets impedes the deal, a decline of 41 percent since the 2013 survey.
  • As credit quality continues to improve, 60 percent of bank leaders now reveal that post-merger integration was the most difficult aspect of their most recent deal—up by 33 percent from last year’s survey.
  • Price is still an issue. When asked about barriers to buying another bank, 63 percent say that the pricing expectations of potential targets are unrealistically high. Fifty-six percent say that current pricing is too low to sell the bank.
  • Both buyers, at 53 percent, and sellers, at 45 percent, prefer a mix of cash and stock as payment for the purchased bank. The percentage of potential sellers that would prefer that the transaction include stock has increased by 30 percent since the 2013 Bank M&A Survey, likely a reflection of higher valuations for bank stocks.
  • Eighty-three percent feel that their institution has adequate access to the capital needed to meet the demands of Basel III and fuel the bank’s growth and acquisition strategy.
  • Three-quarters of respondents integrated board members and/or executives from the acquired bank into the surviving institution after their most recent acquisition.

Download the summary results in PDF format.


Emily McCormick

Vice President of Editorial & Research

Emily McCormick is Vice President of Editorial & Research for Bank Director. Emily oversees research projects, from in-depth reports to Bank Director’s annual surveys on M&A, risk, compensation, governance and technology. She also manages content for the Bank Services Program. In addition to regularly speaking and moderating discussions at Bank Director’s in-person and virtual events, Emily regularly writes and edits for Bank Director magazine and She started her career in the circulation department at the Knoxville News-Sentinel, and graduated summa cum laude from The University of Tennessee with a bachelor’s degree in Spanish and International Business.