Tuesday, December 1, 2015

Seeking partners in the suburbs: What will Beneficial buy?

Little lenders still want big prices

Seeking partners in the suburbs: What will Beneficial buy?


Since Philadelphians aren't borrowing, driving loan prices and terms down in the face of tough competition, Beneficial Mutual Bancorp, the largest bank still based in the city, is looking for suburban acquitisions as the way to grow, writes analyst Frank Schiraldi at Sandler O'Neill + Partners, New York.

What will Beneficial buy? "We expect a targeted deal to run around the $500 million asset level, and we think the most attractive deals would fill out Bucks and Chester Counties," Schiraldi reports.

That's a short list including, for example, First National of Newtown, First of Perkasie, Univest in Souderton, and Quakertown National up in Bucks; and Malvern Federal (once converted to stock), DNB in Downingtown, and maybe Meridian or Penn Liberty, in Chester County.

But there's been a lot more bank merger talk than bank mergers. Beneficial's been shopping for a awhile now. Why still no deal?

Those little banks want big prices: "Seller expectations have not come down," Schiraldi sighs. Indeed, Beneficial CEO Gerry Cuddy "do(es)n't necessarily need to do another acquisition" before his bank finishes its own stock conversion. Which would, by the way, make Beneficial itself a deal target. 

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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