BIRMINGHAM, Ala.--(BUSINESS WIRE)--Integrated Legacy Solutions (ILS), the leading provider of technology for image and data migrations and conversions to the financial services industry, today released its yearly overview of bank merger and acquisition data for the entirety of 2017. Derived from data provided by the Federal Reserve System, the research quantifies all U.S. bank M&A activity occurring between January 2017 and December 2017 to monitor larger trends in the space, including total mergers and acquisitions, activity by state and region, the asset sizes of acquired and acquiring banks and transaction pricing, among other insights.
There were a total of 248 completed bank M&A transactions in 2017, representing a 13% decrease in total transactions from 2016 and a 16% decrease compared to the five-year average. The Atlanta, Mid-South and New England FDIC regions were the only areas of the country that experienced M&A growth over the past year, with the Mid-South seeing a 19% increase and Atlanta and New England an 11% increase. In addition, the overall median price to tangible book value for these transactions steadily rose throughout the year, jumping from 1.31 times book in 2016 to 1.61 times book in 2017.
“The increase in transaction prices is likely a significant contributor to the declining volume of bank M&A activity that has occurred over the past year,” said Martin Webster, director of business development for ILS. “The decreasing number of community banks may also have something to do with the decline; as M&A activity peaked in 2015, there are fewer community banks, and thus, fewer opportunities to acquire.”
Other notable insights from the 2017 research include:
- The Atlanta and New England FDIC regions are the only areas of the country that have experienced M&A growth over the past five years, with Atlanta seeing a 13% increase and New England a 4% increase.
- The Southwest and San Francisco regions have experienced a significant decline in the number of completed transactions over the past five years, with the Southwest down 47% and the San Francisco region down 36% since 2013.
- The Chicago region had the most completed transactions in 2017 with 57 total transactions, followed by Atlanta with 49 transactions and Kansas City with 45 transactions.
- Kansas led the United States in total number of completed M&A transactions by state, with 18 completed transactions. Illinois was second with 16 completed transactions.
- Some of the most notable transactions included Kansas City, KS-based Security Bank, which merged 7 banks into one, and Winter Haven, FL-based CenterState Banks, Inc., which acquired four banks to become the largest community bank in the state.
- The average asset size of acquired banks has remained consistent over the last three years at approximately $750MM. The size of acquiring banks has fallen to around $5B over the past two years, compared to more than double that size in prior years.
“While overall M&A activity is down, we’re seeing new players emerge in the M&A landscape, such as acquirers with smaller asset sizes and banks in regions of the country that historically haven’t experienced as much activity,” said Kris Bishop, founder and president of ILS. “These developments attest to the overall health of M&A and suggest that it will remain a prominent growth strategy as we move farther into 2018 and beyond.”
To access the full research, including accompanying graphics, visit: http://www.integratedlegacy.com/Q42017_Review.
About Integrated Legacy Systems
Headquartered in Birmingham, Ala., Integrated Legacy Solutions (ILS) provides industry leading technology for legacy image and data migrations and conversions to the financial industry. ILS’s leadership team has performed data conversion for thousands of financial institutions over their nearly 20 years in the business. Through its flagship product, OmniView™ Browser, efficient business model and focused expertise, ILS has designed innovative ways to “migrate” legacy data much faster and less expensive than other costly and time consuming methods of data conversion. ILS’s success is focused on 3 key areas; customer service, the business (or conversion) process, and the latest technology to convert or migrate legacy systems quickly with minimal disruption to the client’s production environment. For more information, visit: www.integratedlegacy.com.