HUNGRY FOR AN ACQUISITION?

US bank acquisitions appear to be picking up steam over the past several weeks such as BB&Ts purchase of National Penn Bancshares and a slew of smaller deals, with most of the deals being done with banks with less than $500mio in assets, according to Euromoney magazine's November edition and Dealogic. The logic behind these deals, much like the asset management industry, is the growing costs of regulation and the challenges and lack of scale smaller firms have to bear these growing costs.  It appears like smaller banks, which should be the cornerstone of community banking, are possibly in the killing zone with growing regulatory costs, growing IT costs, and low interest rates making this space a difficult business model. Multiples are coming down too as these business factors inhibit the attractiveness of the business model.  

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