Small banks to be gobbled up

Source: Des Moines Register

“We’re expecting a more robust M&A environment because the haves and have-nots have been decided,” said Eric Lohmeier, managing director of Des Moines-based NCP Inc., an investment banking boutique that specializes in mergers and acquisitions.

Jim Chessen, chief economist of the American Bankers Association, said the irony of this year’s merger and acquisition market is that small bank owners are being forced to sell by regulations meant for larger banks. Some of the tactics big banks employed in the pursuit of profit growth just don’t work in rural America, where one dissatisfied customer can have a much larger impact on a bank’s reputation than in heavily populated urban areas.

“We have seen an avalanche of new regulations on the banking industry the past several years, and while the impression was that the legislation was targeted at the largest institutions, the fact is that it’s had a widespread impact on the smallest banks in the country,” Chessen said. “There’s going to be more interest in finding merger partners because you need to be bigger to manage the compliance burden.”

Read more: http://www.desmoinesregister.com/article/20130127/BUSINESS/301270017/Small-banks-to-be-gobbled-up?Frontpage

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Are regulations to blame for this??