2014 M&A on track for increase

By Sudarshan Agrawal, SNL Financial staff writer

Year-to-date through May 15, 95 deals were announced in the banking sector with a cumulative deal value of $4.3 billion and a median price to tangible book of 142.30%. Over the same period of 2013, the M&A market saw 74 deal announcements with an aggregate deal value of $2.4 billion and a median price to tangible book of 116.86%.

The first quarter closed with 57 bank deal announcements, compared to 50 deals in the first quarter of 2013. The aggregate deal value rose to $2.6 billion in the first quarter, compared to $1.8 billion over the same period of 2013. The median price to book value logged in the first quarter stood at 133.26%, and it was 142.63% in the second quarter so far.

There were 231 deals announced in 2013, up from 223 deals in 2012. The value of deals in 2013 totaled $14.2 billion, up from $12.8 billion in 2012. The improvement in pricing was substantial. Last year's median price-to-tangible book ratio of 124.71% stood in contrast to 115.08% in 2012.

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The most expensive deal announced since January 2013, in terms of price-to-tangible book value ratio, is San Antonio-based Cullen/Frost Bankers Inc.'s pending acquisition of Odessa, Texas-based WNB Bancshares Inc. The deal entails a price-to-tangible book value ratio of 284.12%.

Second on the list is the acquisition of Houston-based BOH Holdings Inc. by McKinney, Texas-based Independent Bank, a unit of Independent Bank Group Inc. The cash-and-stock transaction, announced Nov. 21, 2013, carried a price-to-tangible book ratio of 262.37%.

With an announced price-to-tangible book value ratio of 257.89%, Houston-based Prosperity Bancshares Inc.'s acquisition of Victoria, Texas-based FVNB Corp. gained the third spot on the most expensive deals list. The company ended up paying 289.6% of tangible book value at closing.

The most expensive deal so far in 2014 is Tupelo, Miss.-based BancorpSouth Inc.'s planned acquisition of Monroe, La.-based Ouachita Bancshares Corp., with a price-to-tangible book value of 219.72%. The cash-and-stock deal, valued at $112.0 million, grabbed the fifth position on the list of most expensive deals announced since Jan. 1, 2013.

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PacWest Bancorp's deal to buy Los Angeles-based CapitalSource Inc. for $2.4 billion topped the list of largest deals since Jan. 1, 2013. The deal was closed in April 2014, and the final value paid by the acquirer rose to approximately $3.2 billion.

Coming in second on the list of largest deals is Portland, Ore.-based Umpqua Holdings Corp.'s purchase of Spokane, Wash.-based Sterling Financial Corp. for about $2.0 billion.

The largest whole-bank deal announced in 2014 so far, in terms of deal value, is the acquisition of OmniAmerican Bancorp by Southside Bancshares, which secured the tenth position on the list of the largest deals announced since the outset of 2013.

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Deals listed

Bank and thrift deals announced between April 24, 2014, and May 15, 2014, included the following:

• Fort Worth, Texas-based Carlisle Bancshares Inc. unit Northstar Bank of Texas agreed to acquire Fort Worth-based Community Bankers Inc. The terms of the deal, announced May 15, were not disclosed.

• Fort Pierce, Fla.-based HCBF Holding Co. Inc. unit Harbor Community Bank agreed to acquire Sebring, Fla.-based Highlands Independent Bank from Highlands Independent Bancshares Inc. The terms of the deal, announced May 15, were not disclosed.

• Denver-based Sturm Financial Group Inc. unit ANB Bank agreed to acquire Laramie, Wyo.-based Capital West Bank, a unit of First Capital West Bankshares Inc. The terms of the deal, announced May 13, were not disclosed.

• Tioga, N.D.-based Bank of Tioga, a unit of Tioga Bank Holding Co., is set to be acquired by Treynor, Iowa-based Treynor Bancshares Inc. unit Treynor State Bank. The terms of the deal, announced May 13, were not disclosed.

• Moline, Ill.-based McLaughlin Holding Co. unit Southeast National Bank agreed to acquire Buffalo, Iowa-based Buffalo Savings Bank from APM Bancorp Inc. The terms of the deal, announced May 9, were not disclosed.

• Boca Raton, Fla.-based 1st United Bancorp Inc. is set to be acquired by Wayne, N.J.-based Valley National Bank, a unit of Valley National Bancorp. The deal, announced May 8, was valued at $312.8 million.

• On May 8, Kalispell, Mont.-based Glacier Bancorp Inc. unit Glacier Bank announced its plans to acquire Grand Junction, Colo.-based FNBR Holding Corp. in a cash-and-stock deal valued at $30.3 million.

• Pine Bluff, Ark.-based Simmons First National Corp. on May 6 announced its plans to acquire Union City, Tenn.-based Community First Bancshares Inc. for $243.4 million.

• Bryn Mawr, Pa.-based Bryn Mawr Bank Corp. unit Bryn Mawr Trust Co. agreed to acquire Plymouth Meeting, Pa.-based Continental Bank Holdings Inc. The deal, announced May 5, carries a price tag of $108.8 million.

• On May 5, Coral Gables, Fla.-based Bank of Coral Gables announced its agreement to be acquired by Elk Grove Village, Ill.-based First American Bank, a unit of First American Bank Corp. The terms of the deal were not disclosed.

• Riverside, Calif.-based First National Bank of Southern California announced May 5 its plans to acquire Big Bear Lake, Calif.-based First Mountain Bank for $14.1 million in cash.

• Houston-based Green Bancorp Inc. unit Green Bank NA agreed to acquire Plano, Texas-based SP Bancorp Inc. The deal, announced May 5, was valued at $49.1 million.

• Kensington, Minn.-based Kensington Bancorp. Inc. unit Kensington Bank on March 17 agreed to acquire Herman, Minn.-based First National Bank of Herman, a subsidiary of Herman Bancshares Inc. The terms of the deal, announced May 5, were not disclosed.

• Maringouin, La.-based Banque of Maringouin Holding Co. Inc. is set to be acquired by New Roads, La.-based Guaranty Bank and Trust Co., a unit of Great Guaranty Bancshares Inc. The terms of the cash deal, announced May 2, were not disclosed.

• Abernathy, Texas-based Turner Bancshares Inc. on April 30 announced its plans to acquire Abernathy-based Algodon de Calidad Bancshares Inc. Turner Bancshares Inc. will pay $640 for each share that Tom Turner does not own and will issue 125,000 shares of its common stock to acquire 1,250 shares from Tom Turner. Turner Bancshares will also pay off approximately $1.1 million of existing indebtedness of Algodon de Calidad Bancshares Inc.

• On April 30, Ames, Iowa-based Ames National Corp. unit First National Bank Ames Iowa agreed to acquire all of the assets and assume substantially all of the liabilities from West Des Moines, Iowa-based First Bank.

• Fort Worth-based OmniAmerican Bancorp Inc. is set to be acquired by Tyler, Texas-based Southside Bank, a subsidiary of Southside Bancshares Inc. The deal, announced April 29, was valued at $313.9 million.

• First Financial Bancorp. unit First Financial Bank NA on April 29 announced its plans to acquire Westerville, Ohio-based Guernsey Bancorp Inc. for $13.5 million in cash. First Financial Bancorp will also pay off all amounts due under a certain promissory note from Guernsey Bancorp Inc. to Ohio Valley Bank Co., amounting to approximately $2.6 million.

• Atlanta-based State Bank Financial Corp. unit State Bank and Trust Co. agreed to acquire Atlanta-based Atlanta Bancorp. Inc. The deal, announced April 28, was valued at $25.2 million.

• Springfield, Tenn.-based Commerce Union Bancshares Inc., through its subsidiary Commerce Union Bank, agreed to acquire Brentwood, Tenn.-based Reliant Bank. The stock deal, announced April 28, was valued at $48.1 million.

• Marietta, Ga.-based First Landmark Bank on April 28 announced its plans to acquire Atlanta-based Midtown Bank & Trust Co. The terms of the deal were not disclosed.

• Stuart, Fla.-based Seacoast Banking Corp. of Florida unit Seacoast National Bank on April 24 announced its plans to acquire Winter Park, Fla.-based BANKshares Inc. in an all-stock deal valued at $76.5 million.

• Walla Walla, Wash.-based Banner Corp. unit Banner Bank agreed to acquire Boise, Idaho-based Idaho Banking Co., a unit of Idaho Bancorp. The deal, announced April 24, was valued at $2.6 million.