Academic journal article ABA Banking Journal

Trends in Branch Deals

Academic journal article ABA Banking Journal

Trends in Branch Deals

Article excerpt

Branch deal activity has slowed significantly in 2007 with 36 deals announced as of Sept. 4, 2007. To put the decline in perspective, in 2006 the industry saw 104 deals, in 2005 there were 86, and in 2004 there were 112. The all time high over the last 20 years was 246 in the M&A heyday of 1997. Deal activity hasn't been this low since the late 1980s. But with margins pinched and the operating environment stressed it makes sense that more banks are placing efficiency before expansion, and taking a close look at their current networks.

A more detailed look (see chart) shows that on a state level, year-to-date 2007, California was the most expensive to do a branch acquisition. The average franchise premium/deposits ratio was 13% on one deal between Capital Corp. of the West and Zions Bancorp, in which their County Bank and National Bank of Arizona units traded 11 branches. Earlier in the year Zions trimmed three Las Vegas-based in-store branches from its network in a deal between its Nevada State Bank and Amalgamated Bank.

New York led the nation in terms of the number of branches changing hands at 20. New York Community Bancorp's 11-branch deal with Doral Financial Corp. comprised the bulk of that. The other branches were sold by First Niagara Financial Corp. to Elmira Savings Bank (four) and Legacy Bancorp (five).

Illinois saw 13 branches change hands in three deals, with an average premium to deposits of 11.35%. The largest of the deals, in terms of number of branches, was Hometown Community Bancorp unit Morton Community Bank's acquisition of seven Associated Banc-Corp branches.

The leader in terms of number of deals was Wisconsin where Associated Banc-Corp sold nine branches in three deals, which along with the deal in Illinois, made Associated the most prolific branch seller of the year. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.