Climate Improves for Bank Acquisitions in 2015

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BRENTWOOD, TENN., November 17, 2014 –Today’s environment could yield more bank mergers and acquisition (M&A) activity, according to two-thirds of the CEOs, senior executives and bank directors who responded to Bank Director’s 2015 Bank M&A Survey, sponsored by public accounting and consulting firm Crowe Horwath LLP. Many of these respondents cite signs of a healthier banking environment, such as improved credit quality and stock valuations, as indicators of a more positive climate for bank M&A.

Sixty-nine percent of the respondents who see a more favorable environment for deal-making also believe that more banks want to sell, but just three percent say they plan to sell the bank within the next 12 months. Almost half say their institution plans to purchase another bank within the same time period.

Despite the challenges of a highly competitive growth environment and costly regulations, almost two-thirds of respondents expect their bank to thrive as an independent entity for at least the next 24 months.

In addition to measuring the current climate for bank deals, the 2015 Bank M&A Survey uncovers the opportunities and challenges facing bank leadership as they strive to grow and position the bank for the future. The survey was completed in September by 215 senior executives, chairmen and independent directors of U.S. banks.

Key findings include:

  • Credit quality is improving, and is less likely to torpedo a deal. Thirty-five percent of respondents say that the asset quality of potential targets is a barrier to making an acquisition, a decline of 41 percent since the 2013 survey. 
  • As credit quality continues to improve, bank leaders now reveal that post-merger integration was the most difficult aspect of their most recent acquisition—up by one-third from last year’s survey. 
  • Price is still an issue. When asked about barriers to acquiring another bank, 63 percent say that the pricing expectations of potential targets are too high. Fifty-six percent say that current pricing is too low to sell the bank. 
  • Bank leaders see no impact on their M&A strategies as a result of Basel III, according to 84 percent of respondents. Eighty-three percent feel that their bank has adequate access to the capital needed both to meet the demands of Basel III and fuel their institution’s growth and acquisition plans. 

Full survey results are available online at BankDirector.com, and will be featured in the 1st quarter 2015 issue of Bank Director magazine.

Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its quarterly Bank Director magazine, executive-level research, annual conferences, and its website, BankDirector.com, Bank Director reaches the leaders of the institutions that comprise America’s banking industry. Bank Director is headquartered in Brentwood, Tennessee.

Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of “Building Value with Values®,” Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk, and performance services. With a total of more than 3,000 personnel, Crowe and its subsidiaries have offices coast to coast. The firm is recognized by many organizations as one of the country’s best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world, consisting of more than 150 independent accounting and advisory services firms in more than 100 countries around the world.

Contact: Emily McCormick, director of research, (615) 777-8471, [email protected]

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