5 Regional Banks That Could Make an Acquisition

While merger and acquisition (M&A) activity will likely pause in the banking industry until the economy rebounds and there is less uncertainty about credit quality, the wave that resulted in roughly 5% of industry consolidation in 2019 shows no signs of slowing. That's according to Tom Michaud, president and CEO of Keefe, Bruyette & Woods (KBW), a bank research firm and investment bank that advised on two-thirds of the largest bank mergers last year. Michaud recently said on CNBC's The Exchange that he expects M&A activity to rebound to potentially even higher levels.

"I think its pretty simple: Look at the stocks that had better price-to-tangible-book valuations and those that don't. You'll get kind of an idea who can be a buyer in this market and that's where you will look for a signal," he said on the show.

Tangible book value shows the value of a company if it is going out of business and must liquidate all of its assets. It excludes goodwill and other intangible assets because they can't be converted into assets of value during a liquidation event. While the market is volatile and valuations seem to constantly be changing, I examined the price-to-tangible-book valuations of most of the large regional banks between $40 billion in assets all the way to nearly half a trillion in assets to better understand the M&A landscape right now. Here are five large regional banks well-positioned to make a move.

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Source Fool.com