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It's accounting — specifically purchase accounting, Gerard Cassidy of RBC Capital Markets says in a Q&A. The problem will persist until the economy and the real estate market improve further, he warns.
May 7
Get over it.
That's what bankers, investment bankers, private equity investors, ex-regulators and others will be saying between the lines at an M&A symposium sponsored by American Banker on Monday and Tuesday in New York.
The get-together is officially called
"You gotta get a little creative," Rusty Cloutier, the chief executive of MidSouth Bancorp (MSL) in Lafayette, La., said in an interview. He was previewing his planned remarks about the attitudes of buyers and sellers.
Many in the industry,
Ultimately, it takes two to tango.
"What you gotta do, you gotta figure out what the buyer wants and try to match it up and try to make sure it works for you," Cloutier says. "The buyer has got to be creative, and the seller has got to be creative. You gotta put your heads together and say what can we get done."
He cited a deal MidSouth did in Dallas last year;
More conversations are going on behind the scenes than in months back, says Allen G. Laufenberg, the managing director of investment banking at Stifel Nicolaus Weiser.
Sellers' expectations still remain high in stronger markets like Texas. And, in weaker regional economies like in the Midwest, negotiators are closer together on tangible book value but farther apart on how much the sellers' assets should be marked down under accounting requirements, Laufenberg says.
For those reasons, so-called
Why? "The sellers are more receptive to the concept because of the core funding — they understand the benefit of being part of a bank," says Laufenberg, who will participate in a panel discussion Monday on niche deals with Barry Winslow, a vice chairman at TCF Financial (TCB) in Wayzata, Minn., which has expanded into equipment, boat, recreational vehicle and used-car loans.
"Buyers are looking at this as a nice way to enhance or complement their existing business and have some potential higher asset-yielding loans than what they can put on in some of their core markets," Laufenberg says. Buyers often see such deals as a good use of excess liquidity.
The two-day conference will feature prominent industry names such as
It will be held at the Metropolitan Club of New York, and onsite registration will be available.