National Financial Services M&A Transaction Perspective
Bank mergers and acquisitions (M&A) were hard hit last year, with only 168 announced whole bank and thrift transactions in 2022. Excluding the pandemic low of only 112 transactions in 2020, banking M&A fell to its lowest level since 2011 when only 145 transactions were recorded. The unexpected liquidity crisis in early 2023 that included the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank sent shockwaves through the banking industry and further cooled the already tepid bank M&A market.
Transaction activity through June 2023 has slowed significantly from the prior year, putting deal activity for the year on pace for even fewer deals than in 2022. Year-to-date through June 2023 has seen a total of 42 announced transactions nationwide, which is significantly lower than the 84 transactions announced through June 2022.
Pricing for whole bank and thrift transactions in 2022 was nearly flat compared to 2021, with an average price to tangible book value (P/TBV) of 155% in 2022, compared to 157% in 2021. Pricing in 2022 also was reasonably in line with the pricing seen pre-pandemic of 158% P/TBV in 2019. Based on transactions with pricing data available, P/TBV has averaged 130% through June 2023.
Stock prices for banks continue to face downward pressure in 2023. The Dow Jones U.S. Banks Index (DJUSBK) is down 6.50% at $390.05 for the 12-month period ended June 30, 2023, while the KBW Nasdaq Bank Index (BKX) is down 21.67% at $80.21 in the same period.
West Region
In the West Region, there have been three announced transactions year-to-date June 2023, which is behind the seven transactions announced through June 2022. Based on transactions with pricing data available, P/TBV averaged 170% in the West Region in 2022. Based on the two transactions with pricing data available, P/TBV has averaged 96% in the West Region through June 2023.
Mid-Atlantic Region
In the Mid-Atlantic Region, there have been two announced transactions year-to-date June 2023, which is behind the seven transactions announced through June 2022. Based on transactions with pricing data available, P/TBV averaged 127% in the Mid-Atlantic Region in 2022. Based on the two transactions with pricing data available, P/TBV has averaged 131% in the Mid-Atlantic Region through June 2023.
Midwest Region
In the Midwest Region, there have been 23 announced transactions year-to-date June 2023, which is behind the 38 transactions announced through June 2022. Based on transactions with pricing data available, P/TBV averaged 150% in the Midwest Region in 2022. Based on the three transactions with pricing data available, P/TBV has averaged 138% in the Midwest Region through June 2023.
Northeast Region
In the Northeast Region, there has been one announced transaction year-to-date June 2023, which is behind the three transactions announced through June 2022. Based on transactions with pricing data available, P/TBV averaged 149% in the Northeast Region in 2022. There have been no transactions with pricing data announced year-to-date through June 2023 in the Northeast Region.
Southeast Region
In the Southeast Region, there have been seven announced transactions year-to-date June 2023, which is behind the 18 transactions announced through June 2022. Based on transactions with pricing data available, P/TBV averaged 173% in the Southeast Region in 2022. Based on the two transactions with pricing data available, P/TBV has averaged 150% in the Southeast Region through June 2023.
Southwest Region
In the Southwest Region, there have been six announced transactions year-to-date June 2023, which is behind the eight transactions announced through June 2022. Based on transactions with pricing data available, P/TBV averaged 172% in the Southwest Region in 2022. There have been no transactions with pricing data announced year-to-date through June 2023 in the Southwest Region.
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