New pressure on banks to pay back their bailout money should spur more mergers and acquisitions — eventually.
That was the prediction this week by the heads of
SCBT, of Columbia, intends to pay back Peoples' more than $13.2 million in Tarp as part of its $28 million takeover of the Easley bank.
The question of whether government arm-twisting was a factor was raised in a conference call on Tuesday by Joseph Fenech, a managing director with Sandler O'Neill & Partners LP, who cited "
"No, the regulators were not really a factor in terms of this decision for us," Andrew Westbrook, the president and chief executive of $550 million-asset Peoples, said. "For us it had more to do with, unfortunately, [the fact that] we have been a pretty thinly traded stock … . We have not been paying a dividend."
SCBT Chief Executive Robert R. Hill Jr. said Tarp repayment is a problem for other targets SCBT has spoken with, describing it as something "hanging around their neck" because "all their future earnings are going to really pay that out."
"So I think you're going to see the Tarp overhang as an M&A catalyst over the next couple years," Hill said.