Kind of interesting future on the horizon for banks, according to a bank analyst from Memphis-based Wunderlich Securities:
Kevin Reynolds says there are several factors that point toward a big M&A “super-cycle.”
- Overcapacity in the space. (More than 7,000 banks in the U.S. and more than 90 percent with less than $1B in assets.)
- More than 85 percent of financial institutions in the part of the country bounded by Texas, Arkansas, Tennessee and Virginia are privately held and without efficient access to capital markets.
- The industry is facing more regulation, greater capital requirements, higher costs and low-interest rate environment.
- And the clock is ticking. About 40 percent of U.S. bank CEOs are older than 60.