Merger activity tempered in November relative to prior months, a trend we attribute, at least partially, to the election timing as would-be sellers and buyers alike awaited greater visibility on the political outlook. Pricing remains a mixed bag, as it were, as only two of November’s transactions revealed pricing terms.
Conditions are now aligning for a significant acceleration in consolidation activity in the quarters ahead. Stiffening headwinds – including NIM compression, slowing growth, increasing loan competition, and excess balance sheet liquidity – are driving heightening acquirer appetites. Conversely, insufficient scale, looming political and regulatory changes, a desire for shareholder liquidity, and general operating fatigue, among other factors, are collectively fueling a swelling in the number of potential sellers.
Finally, on November 13th, 22nd State Bank acquired 1 branch from Bank OZK and on November 30th, Citizens Bank was acquired by Bank of Holly Springs and Escambia County Bank was acquired by AmeriFirst Bank in unrelated transactions (Olsen Palmer client indicated in bold). Olsen Palmer is one of the top 2 bank M&A advisors nationwide based on the number of whole-bank M&A transactions advised in 2020 year-to-date, according to S&P Global.
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