It took about two months longer than planned, but WSFS Financial in Wilmington, Delaware, finally won regulatory approval last week for its
The $15.4 billion-asset WSFS had expected to finalize its $976 million acquisition of the suburban Philadelphia bank early in the fourth quarter, but it did not secure Fed approval until Dec. 17. It now expects to close the deal on Jan. 1. The combined bank will have about $20 billion of assets.
The approval process was clearly drawn out as the Fed was dealing with the twin challenges of increased merger activity and pandemic-fueled staffing shortages, but WSFS’s chief risk officer, Michael Reed, said he was never worried about the deal being rejected.
“We weren’t made aware of anything unusual — it just took longer,” Reed said in an interview. “We never had a concern about getting approved.”
Based on WSFS’s experience as well as other large deals recently getting the Fed’s nod, Reed is confident that dealmaking will continue in 2022 — even as the Biden administration has called for more scrutiny of large mergers and House Financial Services Chair Maxine Waters, D-Calif., has
Indeed,
Additionally, the Fed this week approved Montana-based First Interstate BancSystem’s
The delays aren’t dissuading companies from continuing to pursue deals. Bank of Montreal this week
Chris Marinac, the director of research at Janney Montgomery Scott, said the Bank of West deal signaled that, while delays are a concern, regulators do not appear to be telling buyers to hold off on acquisitions. “There’s still plenty of M&A momentum,” he said.
President Biden in July issued an
But he said the key motivators of bank M&A — scale to invest in technology, business line diversity, geographic expansion — all remain firmly in place.
Reed of WSFS agreed. “From everything we’re hearing, the drivers of M&A are all still there,” he said.
There were 201 bank M&A deals announced as of Dec. 6 this year, compared with 111 for all of 2020, according to data from S&P Global.
With its buyout of Bryn Mawr, WSFS Financial will
WSFS will also emerge with $49 billion of assets under management — doubling its wealth management business. The company also plans to close about 40 overlapping branches, driving more than $70 million in annual expense savings that it can reinvest in digital banking platforms and services.
The acquisition would mark the ninth for WSFS since 2010 and first since it bought
“Clearly, the pandemic accelerated digital adoption,” he said.