Banking M&A Headed for Big Bounce, Say Analyists

Recent Community Banking Deals

There have been several community bank M&A deals in the past few months. They include the following:

Southwest Bancshares

In July, Capital of Texas Bancshares and Texas Hill Country Bancshares merged into Southwest Bancshares, the holding company for The Bank of San Antonio. The combined entity will trade as Southwest Bancshares. The new bank will have total assets of nearly $1.5 billion based on data as of May 31, 2020. While the three banks will merge, they each will retain their brands and leadership teams.

Banking M and A

City First Bank and Broadway Financial

These two banks announced a merger plan in late August. The companies say they will create the largest Black-led minority depository banking institution in the United States. The combined entity will have more than $1 billion in assets and roughly $850 million in total deposits.

Hanover Community Bank and Savoy Bank in Banking Deal

Also in August, Hanover Bancorp, the parent company of Hanover Community Bank, and Savoy Bank announced a merger agreement. The two banks said that Savoy Bank would merge into Hanover Community Bank in a stock and cash transaction valued at approximately $63 million. The Savoy directors own approximately 49% of Savoy’s outstanding shares.

Another Banking Merger, Blue Ridge Bank and Virginia Commonwealth Bank

Richmond-based Virginia Commonwealth Bank and its parent company Bay Banks of Virginia announced a deal in August. They will merge with Blue Ridge Bank of Charlottesville. The merger will create a $2.4 billion banking entity with 35 branches in Virginia and North Carolina.

FirstBank Puerto Rico and Santander

In September, FirstBank Puerto Rico completed the acquisition of Santander’s Puerto Rico business. The deal adds about $5.5 billion in assets, $2.7 billion in total loans, and $4.2 billion in deposits.

F&M Bank and Carroll Community Bank

Finally, Farmers and Merchants Bancshares — the parent company of Farmers and Merchants Bank (“F&M Bank” ), and Carroll Bancorp — the parent company of Carroll Community Bank entered into an Agreement and Plan of Merger on March 6, 2020. At the completion of the transaction, Carroll will be merged into F&M Bank. F&M Bank will be the surviving bank holding company, and Carroll Bank will be merged with and into F&M Bank. F&M Bank will be the surviving Maryland commercial bank.

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Carpenter Wellington PLLC

Carpenter Wellington PLLC

Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.