-
Daryl Byrd is reluctant to discuss specific markets, though he says in an interview Tuesday that his company is open to deals in several states as it looks to grow more outside its home turf in Louisiana.
March 20 -
Wintrust Financial Corp. in Lake Forest, Ill., will raise up to $126.5 million in capital through a preferred stock offering.
March 13 -
SCBT Financial Corp. in Columbia, S.C., announced Tuesday morning that it is buying the $546 million-asset Peoples Bancorporation Inc. in Easley, S.C., for $28 million in stock.
December 20
A number of well-heeled bank acquirers are preparing to pounce.
In recent weeks, at least three serial buyers positioned themselves to strike should the right opportunity arise.
Wintrust Financial (WTFC) raised convertible preferred stock earlier this month, while Iberiabank (IBKC) and SCBT Financial (SCBT) filed shelf registration statements with the Securities and Exchange Commission that would allow them to quickly raise capital.
The moves, industry observers say, could be good indicators of a groundswell of merger-and-acquisition activity for the balance of this year. These already busy acquirers just want to be sure they are well suited to ride the wave.
“It is an encouraging signal that they want to be able to build their war chest so they can execute quickly and with some flexibility,” says Jeff Adams, a managing director at Carson Medlin, a division of Monroe Securities.
“Several of the banks that we view as logical acquirers have expressed opinions that M&A is going to pick up by the end of the year,” Adams adds. “I interpret that as them saying they expect to be doing deals by the end of year.”
Iberiabank, SCBT and Wintrust are among a small group of banks that have been willing to do open-bank acquisitions.
The $4.5 billion-asset SCBT, in Columbia, S.C., on Friday filed a shelf registration to raise up to $300 million, a year after bringing in $34.7 million from a private placement. Calls to SCBT were not returned, but the company is
Kenneth James, an analyst at Sterne Agee & Leach, says the filing reaffirms SCBT’s image as an acquirer.
“I don’t think you need the shelf to think of them as a buyer. They’ve done three failed bank deals and one traditional one,” James says. “This could be a sign that they are thinking, ‘hey, we’ve got a lot of opportunities’. Nothing is probably imminent, but they want to be ready. It is a good thing to have.”
The $15 billion-asset Wintrust, which acquired one bank without assistance last year and has struck several deals to buy failed banks and ancillary lines of business,
Edward Wehmer, Wintrust’s president and chief executive, has been particularly bullish in discussing his desire to buy; he says he visits at least one target a week. Wehmer says the logjam might be breaking. Sellers are getting more realistic about the value of their institutions or the institution’s credit has improved, but directors are fatigued.
“As time goes on, some of the banks are getting healthier. They are taking their losses and liquidating their problems and time is on their side,” Wehmer says. “But there are a lot of guys that just want to get out of the business. They’ve gone through hell and don’t want to hear how management now plans to grow.”
While SCBT and Iberiabank filed shelf registrations, Wehmer said Wintrust chose to raise the capital as convertible preferred to eliminate the worry of the unknown.
“It is like Forrest Gump said. ‘One less thing to worry about’,” Wehmer says. “It is better to have the cash now rather than have Greece blow up on you.”
Chris McGratty, an analyst at Keefe, Bruyette & Woods, says that Wintrust has a history of being prudent with its shareholders’ capital, so the capital raise is an indication that the Chicago-area company sees a lot of opportunity to grow both organically and through acquisitions soon.
“They would not be doing this without the conviction that activity is going to pick up,” McGratty says. “This sends an important message that growth is going to be for real.”
Daryl Byrd, the president and chief executive of the $11.7 billion-asset Iberiabank, said in an interview that his shelf registration, which did not have an assigned value, was just a replacement of an expiring one. The Lafayette, La., company has $300 million of excess capital already on its books; last week it
Still, Byrd says the shelf registration is good to have in case the right opportunity comes available. (Iberiabank has acquired five failed banks in recent years.)
“We always want to have a shelf. I think it is prudent because if you ever need capital it allows you to act promptly,” Byrd says. “You never know what is going to come your way.”
