BRENTWOOD, Tenn., Nov. 12, 2019 /PRNewswire/ — Bank Director, the leading information resource for directors and officers of financial institutions nationwide, today released its 2020 Bank M&A Survey, sponsored by Crowe LLP. Findings released state that the old adage remains true: Banks aren’t bought. They’re sold.
“While acquisition drivers remain much the same, the barriers to completing a deal have shifted over the past five years,” says Emily McCormick, vice president of research at Bank Director. “Bank leaders have frequently bemoaned high price expectations on the part of the seller as a deal barrier in past surveys, but a rising percentage say there is a lack of suitable targets in markets they are in or want to enter.”
Compared to last year’s survey, banks are still seeking the same components in a target. Deposits remain highly prized; 67% say the target’s deposit base is highly important in their decision to pull the trigger on an acquisition. And deposits are fueling acquisition activity: 60% seek to acquire an attractive deposit base. More than half want to increase earnings per share.
“Banks are beginning to focus once again on earnings impact from transactions. Despite all the various bank M&A metrics, at the end of the day, earnings are what drive the ultimate price and are the ultimate arbiter of deal ‘goodness,'” says Rick Childs, partner at Crowe.
Key findings from the survey include:
Deal Pricing Trends
Despite concerns about high prices, 58% believe that…