Updated: Bryn Mawr Trust Co. has cancelled its $33 million plan to buy MidCoast Bank, the third-largest local bank based in Wilmington, after MidCoast chief executive Jim Ladio, who had been tapped to lead the banks' combined Delaware operations, abruptly left. (Read BMTC's brief SEC statements, which don't say why the deal blew up, here. Read my note on the March sale agreement here.)
Bryn Mawr CEO Ted Peters had said Ladio would run the combined companies' Delaware operations when he announced the merger, and reaffirmed this when the banks' executives held a meet-and-greet for clients at the Chase Center on Wilmington's Christina riverfront.
Did Ladio's departure queer the deal? Peters told me he couldn't comment beyond the SEC filing, citing a confidentiality agreement. Ladio did not respond to a call to his Delaware home. Acting MidCoast chief James Keegan's office gave this statement: "As a matter of policy we are unable to discuss any individual employment issues that relate to Mr. Ladio at this time." He added, re Bryn Mawr: "Both organizations mutually decided to go their separate ways."
What does the failed acquisition mean for Bryn Mawr, the largest bank still based in suburban Philadelphia? "MidCoast was a relatively small deal for Bryn Mawr," and Bryn Mawr will likely keep looking to buy other banks, instead of being acquired, as Peters moves toward his scheduled retirement late next year, bank analyst Casey Orr told clients of Sandler O'Neill + Partners in a report last week.
"Our experience suggests that deals that do not close fail to do so as the result of worse-than-anticipated credit" at the bank being bought -- "or failure to culturally integrate, " said Matthew Schultheis, bank analyst at Boenning & Scattergood in West Conshohocken. Better to kill the deal as soon as problems surface, he added.