Bank deals of size are back in vogue following regulatory rollback, and D.A. Davidson analysts have issued a list of banks that could be attractive targets.
By asset size, Comerica Inc., with $72.34 billion of assets in the first quarter, was the largest bank on D.A. Davidson's June 11 list. The report stated the bank has long been a good fit for U.S. Bancorp since Comerica's presence in Texas and Michigan fills gaps in U.S. Bancorp's footprint.
However, the analysts noted that U.S. Bancorp would first need to resolve its regulatory issue. Bank executives have signaled they expect to exit the bank's 2015 consent order regarding Bank Secrecy Act/anti-money-laundering compliance this year.
Bankers and analysts are expecting more large bank deals following the passage of legislation that increases the asset threshold for systemically important financial institutions to $250 billion from $50 billion. The move should encourage the deal appetite of banks already above the threshold, as well as those near the threshold. There has already been one announced deal that fits the profile in 2018: Fifth Third Bancorp, with $141.50 billion of assets. The bank announced May 21 it would acquire MB Financial Inc., which has $20.17 billion of assets.
The D.A. Davidson report highlighted several other banks that could be acquisition targets, broken down by geographic region. In the mid-Atlantic, the analysts tabbed United Bankshares Inc., which has cultivated a presence in the desirable Washington D.C. market. In the Midwest, they called out Commerce Bancshares Inc. and Chemical Financial Corp. In the Northwest, the analysts thought Umpqua Holdings Corp. presented buyers with a lean operation. And in Texas, the analysts included Prosperity Bancshares Inc. and Texas Capital Bancshares Inc. alongside Comerica as potentially attractive acquisition targets.
