Banking Valuation
Quarterly Update
Q1 2016
A publication
from PwC’s
Deals practice
Financial Services Industry - Banking Valuation Quarterly Update
Key Quarterly Trends:
●
Trading multiples exhibited by the largest 20 banks have decreased over the course of the first quarter. Multiples are expected to fluctuate until the market gains more clarity on
the interest rate environment.
●
The rate on the 30-year Treasury bond decreased from 3.0% to 2.6% in the first quarter.
●
The S&P 500 increased by 0.8% in the first quarter. The S&P Composite 1500 Regional Banks (Sub Ind) Index decreased by 10.2% in the first quarter and decreased by 8.6% year-over-year.
●
During the first quarter, there were 17 transactions announced in the banking industry based on the search criteria below. The average publicly disclosed implied price-to-tangible book
and price-to-book multiples of the transactions were 1.5x and 1.3x, respectively. The average and median publicly disclosed implied price-to-earnings multiples of the transactions
were 19.1x and 17.8x, respectively.
Top Twenty US Banks (1)
Price/Tangible Book Value Price/Earnings (LTM) .
Company 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016
Wells Fargo & Company 279.9 277.7 244.6 2.2 2.1 1.9 13.6 13.4 11.8 12.0 12.3 10.6
JPMorgan Chase & Co. 225.0 243.0 216.9 1.4 1.5 1.3 11.0 12.0 10.3 9.3 10.8 9.2
Bank of America Corporation 161.9 175.2 139.6 1.1 1.1 0.9 11.1 11.8 9.6 9.3 10.7 8.5
Citigroup Inc. 156.4 154.2 122.8 0.9 0.9 0.7 17.8 11.8 8.0 8.8 9.0 7.6
U.S. Bancorp 77.9 74.6 70.5 3.0 2.7 2.5 15.8 15.1 14.2 12.2 12.4 11.4
The PNC Financial Services Group, Inc. 48.5 48.4 42.4 1.6 1.6 1.4 13.9 14.3 12.4 11.9 12.7 10.6
BB&T Corporation 28.1 29.5 26.0 2.1 2.0 1.8 14.8 15.3 13.0 11.5 11.9 10.2
SunTrust Banks, Inc. 21.5 21.8 18.2 1.5 1.5 1.3 13.9 12.9 10.7 11.6 12.0 9.9
M&T Bank Corporation 16.9 16.2 17.7 2.3 2.0 1.8 17.0 15.7 16.1 13.0 14.2 11.8
Fifth Third Bancorp 15.4 16.0 13.1 1.4 1.4 1.2 11.7 11.7 8.3 10.4 11.6 9.5
Citizens Financial Group, Inc. 13.2 13.8 11.1 1.2 1.1 1.0 19.3 16.3 13.8 11.8 13.9 9.7
Regions Financial Corporation 12.7 12.5 10.0 1.2 1.2 0.9 12.6 14.7 10.4 10.5 11.3 8.4
First Republic Bank 7.9 9.4 9.7 2.2 2.3 2.3 18.9 22.6 22.6 16.5 18.3 15.6
KeyCorp. 12.1 11.0 9.2 1.4 1.2 1.0 15.1 13.6 12.0 11.3 11.4 8.1
New York Community Bancorp Inc. 7.4 7.9 7.7 2.4 2.5 2.4 15.4 16.4 NM 15.9 14.1 12.7
Huntington Bancshares Incorporated 9.0 8.8 7.6 1.7 1.6 1.4 15.5 14.4 12.5 12.3 12.3 9.8
Signature Bank 6.5 7.7 6.9 2.6 2.7 2.4 20.4 20.8 17.6 16.3 18.5 14.3
Comerica Incorporated 8.0 7.4 6.6 1.2 1.1 1.0 14.7 14.6 14.3 12.9 13.3 11.5
CIT Group Inc. 7.9 8.0 6.3 0.9 0.8 0.7 15.6 16.9 13.8 10.9 10.7 8.1
SVB Financial Group 6.5 6.1 5.3 2.3 1.9 1.6 NM 21.0 15.2 17.8 16.2 12.1
Average 56.1 57.5 49.6 1.7x 1.7x 1.5x 15.2x 15.3x 13.0x 12.3x 12.9x 10.5x
Median 14.3 14.9 12.1 1.6x 1.5x 1.3x 15.1x 14.7x 12.5x 11.8x 12.3x 10.0x
First Quarter Transactions in the Banking Industry (3)
Acquirer Target
Target
Country Announce Date Total Assets (4) Price ($ M)Purchase
Price/ Tangible
Book Value Price/ Book Value
Price/ Earnings (LTM) (5)
Pannónia Nyugdíjpénztár and others MKB Bank Zrt. Hungary 3/30/2016 7,039.8 133.3 - -
-Byblos Bank S.A.L. (BDB:BYB) Banque Pharaon and Chiha SAL Lebanon 3/22/2016 - 91.0 - -
-Guaranty Bancorp (NasdaqGS:GBNK) Home State Bancorp United States 3/16/2016 883.9 133.7 - - 12.0
N/A - To Be Announced TBIF Financial Services B.V. Netherlands 3/15/2016 - 76.7 - -
-Midland Financial Company 1st Century Bancshares, Inc. (NasdaqCM:FCTY) United States 3/10/2016 732.0 108.5 1.6 1.6 42.5
Horizon Bancorp (NasdaqGS:HBNC) Laporte Bancorp, Inc. (NasdaqCM:LPSB) United States 3/10/2016 543.2 89.7 1.1 1.0 19.6
Triumph Bancorp, Inc. (NasdaqGS:TBK) ColoEast Bankshares, Inc. United States 3/7/2016 759.0 70.0 - -
-Arbor Realty Trust Inc. (NYSE:ABR) Agency Business United States 2/25/2016 - 244.6 - -
-EFG International AG (SWX:-EFGN) BSI SA Switzerland 2/22/2016 21,017.5 1,329.0 - - 11.8
Hampton Roads Bankshares Inc. (NasdaqGS:HMPR) Xenith Bankshares, Inc. (NasdaqCM:XBKS) United States 2/10/2016 1,039.5 85.0 1.1 1.0 20.5
Computershare Limited (ASX:CPU) Capital Markets Cooperative, LLC United States 2/3/2016 - 71.2 - -
-Pinnacle Financial Partners Inc. (NasdaqGS:PNFP) Avenue Financial Holdings, Inc. (NasdaqGS:AVNU) United States 1/28/2016 1,165.5 206.8 2.0 2.0 29.9
Chemical Financial Corporation (NasdaqGS:CHFC) Talmer Bancorp, Inc. (NasdaqCM:TLMR) United States 1/26/2016 6,595.9 1,108.8 1.7 1.7 18.6
The Huntington National Bank Inc. FirstMerit Corporation (NasdaqGS:FMER) United States 1/25/2016 25,524.6 3,437.4 1.7 1.2 15.5
Old National Bancorp. (NasdaqGS:ONB) Anchor BanCorp Wisconsin Inc. United States 1/12/2016 2,248.5 449.7 1.3 1.3 3.3
KTCAPITAL CO.,LTD. HK Mutual Savings Bank South Korea 1/7/2016 - 185.4 - -
-OceanFirst Financial Corp. (NasdaqGS:OCFC) Cape Bancorp, Inc. United States 1/5/2016 1,602.0 206.6 1.3 1.1 17.0
Average 472.2 1.5x 1.3x 19.1x
Median 133.7 1.5x 1.2x 17.8x
Notes:
Price/Forward Earnings (2) Market Capitalization ($ B)
Financial Services Industry - Banking Valuation Quarterly Update (continued)
Top Depository US Banks (1)
Price/Tangible Book Value Price/Earnings (LTM) . Price/Forward Earnings (4)
Company 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016
The PNC Financial Services Group, Inc. 48.5 48.4 42.4 1.6 1.6 1.4 13.9 14.3 12.4 11.9 12.7 10.6
Capital One Financial Corporation 43.3 38.4 36.0 1.5 1.2 1.1 10.1 9.8 9.3 9.8 9.2 8.3
BB&T Corporation 28.1 29.5 26.0 2.1 2.0 1.8 14.8 15.3 13.0 11.5 11.9 10.2
Discover Financial Services 25.1 22.9 21.1 2.5 2.2 2.1 10.0 9.6 9.0 9.8 9.4 8.5
Fifth Third Bancorp 15.4 16.0 13.1 1.4 1.4 1.2 11.7 11.7 8.3 10.4 11.6 9.5
Regions Financial Corporation 12.7 12.5 10.0 1.2 1.2 0.9 12.6 14.7 10.4 10.5 11.3 8.4
First Republic Bank 7.9 9.4 9.7 2.2 2.3 2.3 18.9 22.6 22.6 16.5 18.3 15.6
New York Community Bancorp Inc. 7.4 7.9 7.7 2.4 2.5 2.4 15.4 16.4 NM 15.9 14.1 12.7
Huntington Bancshares Incorporated 9.0 8.8 7.6 1.7 1.6 1.4 15.5 14.4 12.5 12.3 12.3 9.8
SVB Financial Group 6.5 6.1 5.3 2.3 1.9 1.6 NM 21.0 15.2 17.8 16.2 12.1
Zions Bancorporation 5.5 5.6 5.0 1.0 1.0 0.9 13.1 20.4 17.0 13.8 14.0 11.3
People's United Financial Inc. 4.6 4.9 4.8 1.8 1.8 1.8 18.9 20.0 19.3 16.0 17.2 15.9
East West Bancorp, Inc. 5.8 6.0 4.7 2.5 2.3 1.8 22.4 17.6 12.5 14.0 14.6 10.7
PacWest Bancorp 4.8 5.2 4.5 2.7 2.8 2.1 20.3 17.3 14.3 15.2 14.9 11.9
Bank of the Ozarks, Inc. 3.2 4.5 3.8 4.0 3.9 2.9 NM NM 21.5 16.1 19.0 13.6
Synovus Financial Corporation 3.8 4.2 3.7 1.3 1.5 1.3 18.3 19.1 15.9 14.7 17.2 13.6
BOK Financial Corporation 4.2 4.0 3.6 1.6 1.5 1.4 15.7 15.1 13.6 12.9 12.4 11.6
BankUnited, Inc. 3.3 3.7 3.6 1.7 1.8 1.7 18.3 21.9 19.3 13.6 15.8 13.2
Average 13.3 13.2 11.8 2.0x 1.9x 1.7x 15.6x 16.5x 14.5x 13.5x 14.0x 11.5x
Median 7.0 7.0 6.4 1.7x 1.8x 1.7x 15.4x 16.4x 13.6x 13.7x 14.0x 11.5x
Top Non-Depository US Banks (2)
Price/Tangible Book Value Price/Earnings (LTM) . Price/Forward Earnings (4)
Company 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016
American Express Company 79.3 68.5 58.8 4.7 3.2 3.4 14.5 12.1 10.9 13.5 12.9 10.9
Capital One Financial Corporation 43.3 38.4 36.0 1.5 1.2 1.1 10.1 9.8 9.3 9.8 9.2 8.3
Synchrony Financial 25.3 25.4 23.9 2.8 2.4 2.2 11.4 11.1 10.2 11.4 10.9 9.3
Discover Financial Services 25.1 22.9 21.1 2.5 2.2 2.1 10.0 9.6 9.0 9.8 9.4 8.5
Ally Financial Inc. 10.1 9.0 9.0 0.7 0.7 0.7 11.2 8.7 8.2 9.3 7.7 7.2
Navient Corporation 8.2 4.1 4.1 2.1 1.2 1.3 6.7 4.1 4.1 8.8 5.6 6.1
Santander Consumer USA Holdings Inc. 8.1 5.7 3.8 2.4 1.3 0.9 10.7 5.9 4.2 9.0 5.8 4.2
Credit Acceptance Corp. 4.1 4.5 3.7 5.8 4.8 4.0 14.7 15.4 12.5 13.7 13.6 9.4
OneMain Holdings, Inc. 6.0 5.6 3.7 3.0 1.9 4.9 11.6 NM NM 19.5 7.8 4.3
LendingClub Corporation 7.3 4.2 3.2 8.5 4.6 3.4 NM NM NM NM NM 18.0
Average 21.7 18.8 16.7 3.4x 2.4x 2.4x 11.2x 9.6x 8.5x 11.7x 9.2x 8.6x
Median 9.1 7.3 6.6 2.7x 2.0x 2.1x 11.2x 9.7x 9.1x 9.8x 9.2x 8.4x
Top Custody US Banks (3)
Price/Tangible Book Value Price/Earnings (LTM) . Price/Forward Earnings (4)
Company 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016 3/31/2015 12/31/2015 3/31/2016
State Street Corporation 30.3 26.8 23.4 2.6 2.4 2.1 16.7 16.5 13.3 12.6 12.6 10.7
The Bank of New York Mellon Corporation 44.9 45.1 39.6 3.2 3.6 3.1 15.7 16.9 15.0 13.2 13.3 10.8
Northern Trust Corporation 16.3 16.7 14.9 2.2 2.1 1.9 21.3 18.3 16.3 15.9 17.1 14.3
U.S. Bancorp 77.9 74.6 70.5 3.0 2.7 2.5 15.8 15.1 14.2 12.2 12.4 11.4
Wells Fargo & Company 279.9 277.7 244.6 2.2 2.1 1.9 13.6 13.4 11.8 12.0 12.3 10.6
M&T Bank Corporation 16.9 16.2 17.7 2.3 2.0 1.8 17.0 15.7 16.1 13.0 14.2 11.8
Comerica Incorporated 8.0 7.4 6.6 1.2 1.1 1.0 14.7 14.6 14.3 12.9 13.3 11.5
SunTrust Banks, Inc. 21.5 21.8 18.2 1.5 1.5 1.3 13.9 12.9 10.7 11.6 12.0 9.9
UMB Financial Corporation 2.4 2.3 2.6 1.8 1.4 1.6 20.2 22.0 24.3 14.9 15.5 15.6
Regions Financial Corporation 12.7 12.5 10.0 1.2 1.2 0.9 12.6 14.7 10.4 10.5 11.3 8.4
Average 51.1 50.1 44.8 2.1x 2.0x 1.8x 16.1x 16.0x 14.7x 12.9x 13.4x 11.5x
Median 19.2 19.3 17.9 2.2x 2.1x 1.8x 15.8x 15.4x 14.3x 12.8x 12.9x 11.1x
Notes:
(1) Market data provided by Capital IQ, Inc. Selected institutions represent the largest depository banks in the U.S. based on market capitalization. (2) Market data provided by Capital IQ, Inc. Selected institutions represent the largest non-depository banks in the U.S. based on market capitalization. (3) Market data provided by Capital IQ, Inc. Selected institutions represent the largest custody banks in the U.S. based on total fiduciary accounts including custody. (4) Price/Forward Earnings calculated on a two year forward looking basis. The formula uses median normalized net income estimates from Capital IQ, Inc.
Market Capitalization ($ B)
Market Capitalization ($ B)
Financial Services Industry - Banking Valuation Quarterly Update (continued)
Purchase Price Allocation Benchmarking - Transactions in the US Banking Industry (1)
Acquirer Target Closing Date
Purchase Price
($ M) Goodwill
Core Deposit Intangible
Ameris Bancorp Jacksonville Bancorp Inc. 3/11/2016 96.4 84.3% 15.7% Seacoast Banking Corp. of FL Floridian Financial Group Inc 3/11/2016 77.6 89.9% 10.1% First Midwest Bancorp Inc. NI Bancshares Corporation 3/8/2016 70.1 65.5% 34.5% CenterState Banks Cmnty Bk of South FL Inc. 3/1/2016 65.0 87.4% 12.6% German American Bancorp Inc. River Valley Bancorp 3/1/2016 87.4 92.7% 7.3% Yadkin Financial Corporation NewBridge Bancorp 3/1/2016 431.3 90.3% 9.7% RBB Bancorp TFC Holding Co. 2/19/2016 83.2 NA NA F.N.B. Corp. Metro Bancorp Inc. 2/13/2016 404.0 82.5% 17.5% Heartland Financial USA Inc. CIC Bancshares Inc. 2/5/2016 76.9 81.9% 18.1% HomeStreet Inc. Orange County Business Bank 2/1/2016 55.9 83.5% 16.5% Pacific Premier Bancorp Security California Bancorp 1/29/2016 120.2 92.2% 7.8% Southern BancShares (NC) Heritage Bankshares Inc. 1/29/2016 55.3 82.4% 17.6% Liberty Bank Naugatuck Valley Finl 1/15/2016 77.8 NA NA Northfield Bancorp Inc. Hopewell Valley Cmnty Bank 1/8/2016 55.4 91.7% 8.3% Park Sterling Corporation First Capital Bancorp Inc. 1/1/2016 87.2 90.3% 9.7% Prosperity Bancshares Inc. Tradition Bancshares Inc. 1/1/2016 71.5 100.0% NA First Merchants Corp. Ameriana Bancorp 12/31/2015 68.9 91.9% 8.1% Community Bank System Inc. Oneida Financial Corp. 12/4/2015 142.1 NA NA Valley National Bancorp CNLBancshares Inc. 12/1/2015 208.1 85.3% 14.7% First NBC Bank Holding Co. State Investors Bancorp Inc. 11/30/2015 51.1 NA NA Heartland Financial USA Inc. Premier Valley Bank 11/30/2015 95.0 89.3% 10.7% Independent Bk Group Inc. Grand Bank 11/1/2015 79.0 NA NA M&T Bank Corp. Hudson City Bancorp Inc. 11/1/2015 3,812.4 89.0% 11.0% Atlantic Capital Bcshs Inc. First Security Group Inc. 10/31/2015 159.0 59.1% 40.9% Camden National Corp. SBM Financial Inc. 10/16/2015 134.9 91.8% 8.2% WSFS Financial Corp. Alliance Bancorp of Penn 10/9/2015 93.4 NA NA PacWest Bancorp Square 1 Financial Inc. 10/6/2015 847.4 92.5% 7.5% First Horizon National Corp. TrustAtlantic Financial Corp. 10/2/2015 81.1 NA NA Banner Corp. Starbuck Bancshares Inc. 10/1/2015 701.6 87.1% 12.9% Bear State Financial Inc. Metropolitan National Bank 10/1/2015 70.0 75.3% 24.7% Green Bancorp Inc. Patriot Bancshares Inc. 10/1/2015 139.4 86.8% 13.2% Home BancShares Inc. Florida Bus. BancGroup Inc. 10/1/2015 102.3 NA NA Home Bancorp Inc. Louisiana Bancorp Inc. 9/15/2015 74.6 87.7% 12.3% United Community Banks Inc. Palmetto Bancshares Inc. 9/1/2015 237.6 89.3% 10.7% Pinnacle Financial Partners Magna Bank 9/1/2015 82.5 90.4% 9.6% Heritage Commerce Corp Focus Business Bank 8/20/2015 54.8 83.5% 16.5% Northwest Bancshares, Inc. LNB Bancorp Inc. 8/14/2015 180.7 92.1% 7.9% Bank of the Ozarks Inc. Bank of the Carolinas Corp. 8/5/2015 65.4 90.6% 9.4% CIT Group Inc. IMB HoldCo LLC 8/3/2015 3,369.1 82.6% 17.4% Pinnacle Financial Partners CapitalMark Bank & Trust 7/31/2015 187.2 96.0% 4.0% First Financial Bankshares FBC Bancshares Inc. 7/31/2015 59.3 94.9% 5.1% BB&T Corp. Susquehanna Bancshares Inc. 7/31/2015 2,500.9 89.0% 11.0% Cathay General Bancorp Asia Bancshares Inc. 7/31/2015 126.0 97.8% 2.2% Horizon Bancorp Peoples Bancorp Inc 7/1/2015 73.3 83.0% 17.0% BNC Bancorp Valley Financial Corp. 7/1/2015 101.2 89.4% 10.6% Renasant Corp. Heritage Financial Group Inc. 7/1/2015 254.4 93.5% 6.5% ESB Bancorp MHC Citizens National Bancorp Inc. 7/1/2015 51.3 NA NA Western Alliance Bancorp Bridge Capital Holdings 6/30/2015 490.6 94.5% 5.5% Sterling Bancorp Hudson Valley Holding Corp. 6/30/2015 563.0 90.1% 9.9% Plaza Bank Manhattan Bancorp 6/29/2015 53.9 NA NA Bridge Bancorp Inc. Community National Bk 6/19/2015 143.8 93.5% 6.5% Farmers National Banc Corp. National Bancshares Corp. 6/19/2015 75.2 85.8% 14.2% BB&T Corp. Bank of Kentucky Finl Corp. 6/19/2015 395.9 94.4% 5.6% IBERIABANK Corp. Georgia Commerce Bancshares 5/31/2015 192.0 94.6% 5.4% UMB Financial Corp. Marquette Financial Companies 5/31/2015 179.7 NA NA Chemical Financial Corp. Lake Michigan Financial Corp. 5/31/2015 187.7 93.2% 6.8% Ameris Bancorp Mrchnt & Sthrn Banks of FL Inc 5/22/2015 50.0 72.5% 27.5% MidWestOne Financial Grp Inc. Central Bancshares Inc. 5/1/2015 143.7 78.3% 21.7% United Community Banks Inc. MoneyTree Corp. 5/1/2015 54.6 75.5% 24.5% Ford Financial Fund II L.P. Mechanics Bank 4/30/2015 360.2 NA NA Stupp Bros. Inc. Southern Bancshares Corp. 4/24/2015 74.5 NA NA Berkshire Hills Bancorp Inc. Hampden Bancorp Inc. 4/17/2015 124.5 94.0% 6.0% Cape Bancorp Inc. Colonial Financial Services 4/1/2015 54.4 NA NA
Average 305.8 87.5% 12.7%
Median 95.0 89.4% 10.6%
Allocation of Purchase Price as a Percentage of Excess Consideration
