As we wrap up this short week, here are three “stories” that caught my eye. As I pack my family up for a few week’s vacation in New England, please enjoy. Happy 5th of July!
1. On Monday, Curtis Carpenter shared with me the news that Prosperity Bank in Texas acquired First Victoria — a deal struck for approximately 2.3x tangible book and 18x earnings. As Houston’s Business Journal details, Prosperity has been on an acquisition streak for some time. The bank has completed six merger or acquisition agreements in the past 18 months. Maybe this deal portends a busier 2nd half of the year, deal-wise, than the first? Certainly something Curtis and his team at Sheshunoff & Co. stand ready to support.
2. On Tuesday, the Fed held an open meeting to finalize “highly-anticipated rules” needed to implement Basel III’s capital requirements in the United States. Since its proposal last year, many executives from banks under $10Bn in asset size have expressed strong concerns with several aspects of the proposed rule. Now, the plan adopted on Tuesday will force all banks to hold more and higher quality capital. However, smaller banks will have a bit more leeway with their capital — which should allow them to take more risks than their larger competitors. While the Fed’s plan requires the nation’s largest banks to abide by stricter capital requirements than had been originally planned, mid-size and community banks appear to have received several breaks. Fed governors, according to the American Banker, said the final package offered an “appropriate sensitivity” in its treatment of smaller-sized financial institutions, “forgoing placing too much burden on firms while still strengthening overall capital standards.” If you want to dig deeper, this table from the Fed highlights those provisions most relevant to smaller, non-complex banking organizations and compares the new capital requirements to the current standards.
3. A lot of digital ink was spilled on Basel III this week; in my opinion, I think the ABA wrote it best: “the real test for Basel III is whether the rule makes it easier or more difficult for banks to serve their customers. If it makes it harder, that’s not what our still-recovering economy needs.” So on a much lighter note, the ICBA shared a top 50 “Community Bank Leaders in Social Media.” Based on fans/followers, engagement, content and frequency of posts, the small bank advocate lists the social media channels being put to use. All have a Facebook page; interestingly, not all have a Twitter account, few utilize YouTube and shockingly few employ LinkedIn (shh… don’t ask about Pintrest, Instagram or other social sites frequented by their young customers). Taking it a step further, they shared a top 20 “Community Banker Influencers on Twitter.” While I’m not sure how some qualified based on the number of followers and/or tweets, it is a good list of bankers if you’re looking to start or expand your twitter-verse.
Aloha Friday!
About That Ratio 