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2017 Sees Increase in Bank M&A Transaction Prices, Decline in Total Acquisitions According to New Data from Integrated Legacy SolutionsIntegrated 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 ofcommunity 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:
"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.
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