US bank deal activity at slowest pace since 2009
James Stevens, a partner in Troutman Pepper's Financial Services Practice Group, was quoted in the July 9, 2020 S&P Global Market Intelligence article titled, " US bank deal activity at slowest pace since 2009."
Deal talks have started to pick back up behind the scenes, said James Stevens, a partner with Troutman Pepper. Banks that were engaging in deal conversations prior to the pandemic are reconvening and new parties are also beginning to explore M&A opportunities, he said in an interview.
"We are definitely seeing people reengaging and talking," he said. "Big shifts like what we have experienced, these massive changes in the economy, are going to loosen people up that maybe were not thinking about doing things before."
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"There's definitely a lot of discussions, but it's not anything like it was before, and I don't think it will be until we get true clarity about what this looks like. Frankly, that's probably not happening in 2020," Stevens said.
For deal announcements to get back to pre-COVID-19 levels, there needs to be more clarity around credit quality and forbearances for people to feel comfortable announcing a deal, according to both Marinac and Stevens.
"Credit quality is the biggest driver. Whether you're a buyer or a seller, if you have uncertainty on your own books or the other people's books, it's just going to be a drag on your ability to get together with someone," Stevens said.
Though there is still a lot of uncertainty, there is more clarity around COVID-19's economic impact than there was a few months ago, so banks may begin to slowly announce deals this year, Stevens said. Marinac believes deal announcements could increase around September and October.