Financial Law Blog

Updates on Banking Law, Investment Management Law, Securities Law, Commodities/Derivatives Law

Tag: Bank M&A

FRB approves bank merger that takes institutions beyond $10 billion and into enhanced prudential standards

The Federal Reserve Board approved the merger of Chemical Financial Corporation with Talmer Bancorp this week. The merger will push these institutions beyond the $10 billion asset mark, thus subjecting the resulting financial holding company to the Federal Reserve’s enhanced prudential standards. In that regard, the FRB notes that “Chemical has the financial and managerial resources to comply with the Board’s [enhanced prudential standards], and the Board will monitor Chemical’s compliance with these regulations through the supervisory process.”

In the financial stability analysis, the FRB highlighted that it “generally presumes that a proposal that results in a firm with less than $25 billion in consolidated assets will not pose significant risks to … financial stability” so long as the resulting institution would not be overly complex. The merger was approved within 7 months of announcement.

Carlyle Group, Lee Equity and HarbourVest invest in Carlile Bancshares, pending regulatory approval

Carlyle Group, along with prior Carlile Bancshares investors Lee Equity and HarbourVest, are investing in a round of Carlile Bancshares securities. Carlile Bancshares, which “was established to invest in community banks throughout the Southwest including Texas, New Mexico, Oklahoma and Colorado” completed its last bank acquisition in 2014. Pending regulatory approval, Carlile Bancshares will have cash for more buys.

Large banks predominantly engaged in retail commercial banking receiving M&A approval from FRB

The Federal Reserve Board yesterday approved Huntington Bancshares’ acquisition of FirstMerit. Both are large institutions — Huntington Bancshares has assets of $71.1 billion and FirstMerit $25.5 billion. On closing Huntington would become the 34th largest depository in the United States.

This merger was approved by the FRB within 6 months of announcement and the approval mirrors the recent Federal Reserve Board approval of KeyCorp’s acquisition of First Niagara Financial Group Inc. In the financial stability analysis, the FRB highlighted that both companies are “predominantly engaged in retail commercial banking activities” and the resulting institution would not be overly complex.

Large bank M&A a possibility for some institutions, regulators say

The Federal Reserve Board recently approved KeyCorp’s acquisition of First Niagara Financial Group Inc. Both are large institutions — KeyCorp has assets of $98.6 billion and First Niagara $40.1 billion. On closing KeyCorp would become the 26th largest depository in the United States.

The FRB noted that both companies are “considered to be well managed” and that the acquirer’s “risk-management program appears consistent with approval.” In approving the large deal, the FRB highlighted that both companies are “predominantly engaged in retail commercial banking activities” and the resulting institution would not be overly complex.

Large banks looking to expand may see this as a welcome development, especially considering the widely held belief that regulators have been lukewarm about any proposed combinations among the large institutions.  F.N.B. Corp. and Yadkin Financial also announced merger plans on Thursday.

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