Top Bank M&A Deals of 2013
December 26, 2013 4:31 PM
Top Bank M&A Deals of 2013
Deals involving large community and midsize banks dominated M&A in 2013. The motives and market conditions involved differed dramatically, but all the dealmakers had and in some cases still have tough questions to answer from regulators, investors and activists.
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BUYER: PacWest Bancorp (PACW)
SELLER: CapitalSource (CSE)
DEAL VALUE: $2.4 billion
ANNOUNCED: 7/22/13
STATUS: Expected to close by mid-February
PacWest CEO Matt Wagner has been aggressively building a West Coast regional player. He bought First California Financial Group (FCAL) in the spring, and shortly afterward announced the biggest deal of 2013, which he said would marry PacWest's "low-cost deposit base" with the "enviable lending platform" of CapitalSource, a commercial finance company. Consumer activists raised concerns about PacWest's community reinvestment record, but PacWest executives told analysts recently that the deal should get done in the first quarter and that the bank could return to the M&A trail soon afterward.
SELLER: CapitalSource (CSE)
DEAL VALUE: $2.4 billion
ANNOUNCED: 7/22/13
STATUS: Expected to close by mid-February
PacWest CEO Matt Wagner has been aggressively building a West Coast regional player. He bought First California Financial Group (FCAL) in the spring, and shortly afterward announced the biggest deal of 2013, which he said would marry PacWest's "low-cost deposit base" with the "enviable lending platform" of CapitalSource, a commercial finance company. Consumer activists raised concerns about PacWest's community reinvestment record, but PacWest executives told analysts recently that the deal should get done in the first quarter and that the bank could return to the M&A trail soon afterward.
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BUYER: Umpqua Holdings (UMPQ)
SELLER: Sterling Financial (STSA)
DEAL VALUE: $2 billion
ANNOUNCED: 9/11/13
STATUS: Expected to close by mid-2014
Umpqua's agreement to buy Sterling embodied two big M&A trends of 2013: the creation of a new class of midtier banks, and the consolidation fever that took hold in the Pacific Northwest. "Size is important," Umpqua CEO Ray Davis said when the deal was announced.
SELLER: Sterling Financial (STSA)
DEAL VALUE: $2 billion
ANNOUNCED: 9/11/13
STATUS: Expected to close by mid-2014
Umpqua's agreement to buy Sterling embodied two big M&A trends of 2013: the creation of a new class of midtier banks, and the consolidation fever that took hold in the Pacific Northwest. "Size is important," Umpqua CEO Ray Davis said when the deal was announced.
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BUYER: Banco de Credito e Inversiones
SELLER: CM Florida Holdings
DEAL VALUE: $881 million
ANNOUNCED: 5/24/13
STATUS: Expected to be completed soon
Globalization's impact on U.S. banking was on full display here. Spain's Bankia had to sell the parent of City National Bank of Florida as part of a recapitalization agreement with European regulators, and the Chilean Banco de Credito is said to have outbid other Latin American banks and some major U.S. players. City National's CEO, Jorge Gonzalez, celebrated Banco de Credito's decision to let it run as an autonomous unit. More deals, especially those with an international flavor, are expected in Miami.
SELLER: CM Florida Holdings
DEAL VALUE: $881 million
ANNOUNCED: 5/24/13
STATUS: Expected to be completed soon
Globalization's impact on U.S. banking was on full display here. Spain's Bankia had to sell the parent of City National Bank of Florida as part of a recapitalization agreement with European regulators, and the Chilean Banco de Credito is said to have outbid other Latin American banks and some major U.S. players. City National's CEO, Jorge Gonzalez, celebrated Banco de Credito's decision to let it run as an autonomous unit. More deals, especially those with an international flavor, are expected in Miami.
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BUYER: MB Financial (MBFI)
SELLER: Taylor Capital Group (TAYC)
DEAL VALUE: $659 million
ANNOUNCED: 7/14/13
STATUS: Expected to close by mid-2014
Taylor Capital CEO Mark Hoppe entered 2013 with the same challenge as most bank execs: generating growth. The Chicago company had been trying to diversify beyond commercial real estate lending and had been successful expanding business, mortgage and asset-based lending. It sought, and failed to find, a branch-acquisition deal, so Taylor Capital decided that merging with "a larger platform with larger capital was the way to go," Hoppe said.
SELLER: Taylor Capital Group (TAYC)
DEAL VALUE: $659 million
ANNOUNCED: 7/14/13
STATUS: Expected to close by mid-2014
Taylor Capital CEO Mark Hoppe entered 2013 with the same challenge as most bank execs: generating growth. The Chicago company had been trying to diversify beyond commercial real estate lending and had been successful expanding business, mortgage and asset-based lending. It sought, and failed to find, a branch-acquisition deal, so Taylor Capital decided that merging with "a larger platform with larger capital was the way to go," Hoppe said.
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BUYER: United Bankshares (UBSI)
SELLER: Virginia Commerce Bancorp (VCBI)
DEAL VALUE: $494.7 million
ANNOUNCED: 1/29/13
STATUS: Scheduled to be completed by Jan. 31
United and Virginia Commerce overshot their goal of closing the deal in the third quarter because of a delay in approval by the Federal Reserve Board, which finally blessed the merger in December. Community activists are said to have protested this deal on community-reinvestment grounds; the Fed showed more sensitivity to their longtime complaints about banks during its reviews of this deal and other recent ones, activists said.
SELLER: Virginia Commerce Bancorp (VCBI)
DEAL VALUE: $494.7 million
ANNOUNCED: 1/29/13
STATUS: Scheduled to be completed by Jan. 31
United and Virginia Commerce overshot their goal of closing the deal in the third quarter because of a delay in approval by the Federal Reserve Board, which finally blessed the merger in December. Community activists are said to have protested this deal on community-reinvestment grounds; the Fed showed more sensitivity to their longtime complaints about banks during its reviews of this deal and other recent ones, activists said.
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BUYER: Union First Market Bankshares (UBSH)
SELLER: StellarOne (STEL)
DEAL VALUE: $445 million
ANNOUNCED: 6/10/13
STATUS: Expected to close by Jan. 1
Union First is set to become the largest community bank in Virginia, with assets of about $7 billion. Its stock has risen more than 25% since the deal was announced, even though CEO G. William Beale said it would take five years to overcome the dilution to tangible book value. It was one of several signs that, provided profit expectations are promising, investors are getting more patient about earn-back periods.
SELLER: StellarOne (STEL)
DEAL VALUE: $445 million
ANNOUNCED: 6/10/13
STATUS: Expected to close by Jan. 1
Union First is set to become the largest community bank in Virginia, with assets of about $7 billion. Its stock has risen more than 25% since the deal was announced, even though CEO G. William Beale said it would take five years to overcome the dilution to tangible book value. It was one of several signs that, provided profit expectations are promising, investors are getting more patient about earn-back periods.
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BUYER: Prosperity Bancshares (PB)
SELLER: FVNB
DEAL VALUE: $380 million
ANNOUNCED: 5/24/13
STATUS: Completed Nov. 1
Prosperity CEO David Zalman showed some flexibility in sealing the deal for FVNB, which had been the oldest independent bank in Texas. Rebuffed three times by FVNB, Zalman eventually won the board over by agreeing to pay a high multiple and giving the seller five days to find a rival bid, despite his preference for negotiated deals.
SELLER: FVNB
DEAL VALUE: $380 million
ANNOUNCED: 5/24/13
STATUS: Completed Nov. 1
Prosperity CEO David Zalman showed some flexibility in sealing the deal for FVNB, which had been the oldest independent bank in Texas. Rebuffed three times by FVNB, Zalman eventually won the board over by agreeing to pay a high multiple and giving the seller five days to find a rival bid, despite his preference for negotiated deals.
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BUYER: Rockville Financial (RCKB)
SELLER: United Financial Bancorp (UBNK)
DEAL VALUE: $370.7 million
ANNOUNCED: 11/14/13
STATUS: Expected to close in mid-2014
Rockville's agreement to buy United Financial has been hailed by several analysts as the truest merger of equals in years. But MOEs require compromise: Rockville CEO William H. W. Crawford 4th would be the boss, but the merged bank would keep the United Financial name. "Both sides had to give up a lot of different things, and name was one of the things we had to give up," Crawford explained.
SELLER: United Financial Bancorp (UBNK)
DEAL VALUE: $370.7 million
ANNOUNCED: 11/14/13
STATUS: Expected to close in mid-2014
Rockville's agreement to buy United Financial has been hailed by several analysts as the truest merger of equals in years. But MOEs require compromise: Rockville CEO William H. W. Crawford 4th would be the boss, but the merged bank would keep the United Financial name. "Both sides had to give up a lot of different things, and name was one of the things we had to give up," Crawford explained.
BUYER: Provident New York Bancorp (PBNY)
SELLER: Sterling Bancorp (STL)
DEAL VALUE: $343.1 million
ANNOUNCED: 4/3/13
STATUS: Completed on 10/31/13
The pressure is on Jack Kopnisky, the CEO of the merged bank, which kept the Sterling name. Right after the deal was announced, skeptics questioned whether the new Sterling could live up to its rosy earnings projections. Kopnisky said in November that the deal will be judged on operating leverage; he wants revenue growth to outpace expense growth by two to three times.
SELLER: Sterling Bancorp (STL)
DEAL VALUE: $343.1 million
ANNOUNCED: 4/3/13
STATUS: Completed on 10/31/13
The pressure is on Jack Kopnisky, the CEO of the merged bank, which kept the Sterling name. Right after the deal was announced, skeptics questioned whether the new Sterling could live up to its rosy earnings projections. Kopnisky said in November that the deal will be judged on operating leverage; he wants revenue growth to outpace expense growth by two to three times.
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BUYER: ViewPoint Financial Group (VPFG)
SELLER: LegacyTexas Group
DEAL VALUE: $300.4 million
ANNOUNCED: 11/25/13
STATUS: Expected to be completed in the second quarter
This large deal was distinctive because of its tightly focused ambition. Most buyers in Texas are trying to grow in multiple Lone Star State markets. But ViewPoint and LegacyTexas are trying to improve their odds against the megabanks in their existing market of Dallas. "Building size and scale in a single market is really important," said Kevin Hanigan, the CEO of ViewPoint.
SELLER: LegacyTexas Group
DEAL VALUE: $300.4 million
ANNOUNCED: 11/25/13
STATUS: Expected to be completed in the second quarter
This large deal was distinctive because of its tightly focused ambition. Most buyers in Texas are trying to grow in multiple Lone Star State markets. But ViewPoint and LegacyTexas are trying to improve their odds against the megabanks in their existing market of Dallas. "Building size and scale in a single market is really important," said Kevin Hanigan, the CEO of ViewPoint.
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