Tuesday, January 27, 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. 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

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

Joseph N. DiStefano
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