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Fifth Third Bank and Royal Bank of Scotland could pursue Chicago-area acquisitions after this week’s National City/ MAF Bancorp deal, sources familiar with the situation said.
Banks such as MB Financial, Wintrust Financial, Midwest Banc Holdings, Private Bank, Taylor Capital Group, and First Midwest, could see purchase interest from them, the sources said.
Two sources familiar with the thinking of Charter One, Royal Bank of Scotland’s Chicago-area banking indirect subsidiary, said that if it fails in its attempt to purchase LaSalle Bank, it will have intense interest in a Chicago-area acquisition, particularly in light of the National City/MAF deal.
National City’s approximately USD 1.9bn purchase of MAF, will catapult it over Fifth Third, and Royal Bank of Scotland’s Chicago-based Charter One Bank, in Chicago-area deposit market share, according to industry figures. Two sources familiar with the thinking of Ohio-based Fifth Third, which itself has been tagged by industry analysts as a potential takeover target, will think intensely about making a Chicago-area acquisition.
“Chicago proper is a very competitive market, one to grow or die in when you are a bigger player,” said one of the sources. “Is there pressure from the [National City/MAF] deal, the answer is yes.” When asked, the sources said Fifth Third could have particular interest in Midwest, Taylor, and Private Bank.
“Those banks in particular, could add value to Fifth Third and are in a possibly less risky lower purchase price range ,” said the second of the sources. In deposit size, those banks are in a tier just below MB Financial, Wintrust and First Midwest, according to industry figures. Fifth Third has seen its share price decline from around USD 70 per share approximately five years ago, to today’s USD 40.79 price.
The second source also noted that Fifth Third has recently undergone a balance sheet restructuring that could enhance its acquisition ability. “[The National City/MAF] deal pushes things and could make the biggest sensible deal it could get in the mid-size range go,” the source added.
Sources familiar with Charter One’s thinking said that should there be failure in its attempt to acquire LaSalle Bank, second in Chicago-area deposit market share, Charter One and its parent Royal Bank of Scotland will be focused on gathering deposits through acquisition, especially in light of the National City/MAF deal. An acquisition for them would likely be in the larger tier of mid-size Chicago-area deposit gathers, Wintrust, First Midwest, and MB Financial, said the sources.
NASDAQ-listed Wintrust, with a market capitalization of approximately USD 1.1bn, saw its first-quarter profit fall 23%, excluding gains on asset sales, and could see pressure to sell, the sources said. With branches concentrated in relatively more upscale suburban Chicago areas, it would be desirable for Charter One, the sources said. “The bigger in deposits, likely the better,” said one of the sources.
According to industry figures, Wintrust has more than USD 9.5bn in assets, First Midwest approximately USD 8.4bn, MB Financial nearly USD 8bn, Private Bank approximately USD 4.3bn and Taylor Capital nearly 3.4bn.
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