BRENTWOOD, TENN., December 5, 2017 – Has Donald Trump’s less than one-year tenure as president of the United States been good for the banking industry? Yes, according to 58 percent of the executives and directors who participated in Bank Director’s 2018 Bank M&A Survey, sponsored by Crowe Horwath LLP.
The “Trump bump” and rising bank valuations experienced earlier this year have likely fueled this sentiment, along with the president’s appointment of regulators that are expected to be more sympathetic to the industry. And more than three-quarters of survey participants believe that the U.S. economy will experience modest growth through the end of 2018—an improvement over last year’s survey, when 31 percent expected an economic downturn.
When asked about their personal views, however, more than half of these bank leaders—54 percent—indicate they are personally dissatisfied with Donald Trump’s ability to do his job as the country’s chief executive.
The 2018 Bank M&A Survey was conducted in September and October of 2017, and surveyed 189 chief executive officers, senior executives and board members of U.S. banks to gain their perspectives on the U.S. economy, the bank M&A environment and their own M&A strategies.
“While many banks and their boards seek growth through acquisition, it is important to note that investors continue to value efficiency and profitability,” says Al Dominick, CEO of Bank Director.
Respondents also reveal mixed opinions about the ability of the U.S. Congress to pass legislation that will benefit the banking industry. Fifty-nine percent expect modest regulatory relief to occur by the end of 2018, while one-third lack confidence that this will come through.
Additional findings include:
- Almost half believe that the current environment for bank M&A is more favorable for deals, and 55 percent say their institution is likely to purchase another bank by the close of 2018.
- Forty-four percent indicate that rising bank valuations have made it more difficult for their bank to compete for or attract acquisition targets.
- When asked about the kinds of acquisitions the bank is willing to make, 83 percent say their board and management team would consider a market extension and 78 percent would consider an in-market deal. Twenty-eight percent would consider an out-of-market deal.
- Few—just 7 percent—are likely to acquire a fintech company by the end of 2018.
“While many banks and boards of directors would like to be acquisitive, the survey also indicates the primary roadblock is that more banks would like to be independent, creating a gap between the pool of buyers and the pool of available banks,” says Rick Childs, a contributor to the survey and a partner at Crowe Horwath.
ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its print and digital editions of 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.
ABOUT CROWE HORWATH LLP
Crowe Horwath LLP is one of the largest public accounting, consulting, and technology firms in the United States. 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. Crowe 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. The network consists of more than 200 independent accounting and advisory services firms in more than 120 countries around the world.
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