M&A's Deposit Chasers
August 14, 2013 9:45 AM
Most bank buyers are looking for loan growth, but a rare few want to add deposits. The following banks have either struck deals for, or are likely buyers of, highly liquid targets.
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Sterling Financial (STSA)
$9.9 billion in assets
Spokane, Wash.
Spokane, Wash.
Sterling agreed this spring to buy Commerce National Bank in Costa Mesa, Calif. The deal aims to complement Sterling's Southern California lending team that is focused on multifamily loans with a full-service banking office. Look for it to do similar deals in greater Los Angeles.
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Pacific Premier Bancorp (PPBI)
$1.55 billion in assets
Irvine, Calif.
Irvine, Calif.
Steven Gardner, Pacific Premier's chief executive, was on the hunt for liquidity last year because its growing warehouse lending business pushed its loan-to-deposit ratio to nearly 100%. Two bank acquisitions lowered its ratio to 80.6%.
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PrivateBancorp (PVTB)
$13.5 billion in assets
Chicago
Chicago
The company regularly reports impressive commercial and industrial loan growth, but analysts say its deposit-gathering ability is lacking. It is viewed as buyer or even a seller. CEO Larry Richman describes its M&A appetite as "opportunistic."
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Southern Missouri Bancorp (SMBC)
$796 million in assets
Poplar Bluff, Mo.
Poplar Bluff, Mo.
Its loans rose 11% at June 30 from a year earlier, and its bank's loan-to-deposit ratio was nearing 100%. In June, Southern announced a deal to buy a bank with a ratio of roughly 55%. CFO Matt Funke says it is on the hunt for other deals.
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PacWest Bancorp (PACW)
$6.7 billion in assets
Los Angeles
Los Angeles
PacWest's recent announcement that it would acquire specialty lender CapitalSource was clearly a move to improve loan growth, but CEO Matt Wagner said future deals could include deposit-heavy banks that would be used to fuel CapitalSource's lending.
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Pinnacle Financial Partners (PNFP)
$5.4 billion in assets
Nashville, Tenn.
Nashville, Tenn.
Improving its funding is a priority for Pinnacle. It could use its strong stock to achieve its goals through M&A, analysts say. CEO Terry Turner says the company is interested in deals in Nashville or Knoxville, but the list of candidates is short.
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Independent Bank Group (IBTX)
$1.8 billion in assets
McKinney, Texas
McKinney, Texas
CEO David Brooks said in May that the acquisitive bank was "paying close attention" to the deposit makeup of its targets. In July, it announced it would acquire Collin Bank in Plano, Texas. The target's loan-to-deposit ratio is 53%, compared with Independent's 99.3%.
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Banks In and Around New York City
New York Community Bancorp (NYCB) is known to buy deposit-rich banks to fund its multifamily-lending operation. ConnectOne Bancorp (CNOB) is on the hunt for deals after recently going public, and it could aim to lower its loan-to-deposit ratio.
The New York City region is home to several thrifts that could turn to dealmaking to improve funding before interest rates go up.
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