Back To Resources
    Subscribe to PCE Communications
    Choose Your Subscription

    Banking, Finance & Insurance Q4 2022

    Q4 2022 Banking Finance Insurance

    Industry Trends

    Fed Slows Pace of Rate Hikes, While Signaling More to Come

    Following four consecutive rate hikes of 0.75 points, the Federal Reserve began dialing down the pace of increases to 0.50 points at the December 2022 meeting. The Fed signaled that a shift to 0.25-point increases could occur as soon as the end of January. The benchmark federal-funds target rate range of 4.25%-4.5% is at a 15-year high, and most Fed officials project the rate to peak between 5.0% and 5.50% this year and then come back down the following year.1

    Insurance M&A Activity Slows in 2022

    Insurance deal activity slowed significantly in 2022, reaching the lowest volume since 2019, as borrowing costs, economic uncertainty, and inflation continue to rise. According to data from S&P, insurance broker deals fell to 685 through November, down from 1,150 in 2021. Insurance underwriter deals also declined, falling from 184 in 2021 to 105 in 2022. The life insurance sector witnessed one of the most significant declines, falling to 30 deals, a 52% drop from the year prior.2

    CFPB Fines Wells Fargo $3.7B for Misapplied Loan Payments

    In a settlement with the Consumer Financial Protection Bureau (CFPB), Wells Fargo agreed to a $3.7 billion deal to resolve allegations of illegally charging fees and interest, among other charges. Over 16 million consumer accounts were affected, and $2 billion of the $3.7 billion will go toward customer restitution. The remaining $1.7 billion is the largest fine in the CFPB’s history and is a sign the agency is becoming more adversarial against offenders.3

    SPAC Deals Take Significant Hits in 2022

    Following a record high in 2021, SPAC offerings fell significantly in 2022, driven by slowing economic conditions, a change in risk appetite among investors, and a challenging regulatory environment. According to data from S&P, the number of SPAC IPOs fell to 78 by the end of the third quarter, down from 444 in the same period a year ago. SPAC M&A deals fell to 129 over the same period, down from 234 a year ago.4

    Largest Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • MUFG Union Bank, National Association
    • U.S. Bancorp
    • $7,970.75
    • Bancshares of Jackson Hole, Incorporated
    • National Bank Holdings Corporation
    • $227.91
    • M&T Insurance Agency, Inc.
    • Arthur J. Gallagher & Co.
    • $192.50
    • Drummond Banking Company
    • Seacoast Banking Corporation of Florida
    • $173.17
    • Apollo Bancshares, Inc./Apollo Bank
    • Seacoast Banking Corporation of Florida
    • $160.35
    • UB Bancorp
    • F.N.B. Corporation
    • $117.00

    Other Financial Buyer Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Northmark Bank
    • Cambridge Trust Company
    • $62.53

    Other Strategic Buyer Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Reserve National Insurance Company
    • Medical Mutual of Ohio
    • $88.00
    • Forever 8 Fund, LLC
    • Cryptyde, Inc.
    • $73.34
    • Liberty Bancshares, Inc. (Ada, OH)
    • Middlefield Banc Corp.
    • $62.81
    • Northmark Bank
    • Cambridge Trust Company
    • $62.53
    • Vision Financial Group, Inc.
    • Civista Bank
    • $39.10
    • Freedom Bancshares, Inc.
    • Landmark Bancorp, Inc.
    • $33.35

     

    Source S&P Capital IQ as of 1/9/2023 and PCE Proprietary Data

    Subscribe to PCE's Quarterly Industry Reports

    PCE Transactions

    Contacts
    David Jasmund

    David Jasmund

    Orlando Office

    407-621-2111

    Contact Me Now
    Michael Poole

    Michael Poole

    Orlando Office

    407-621-2112

    Contact Me Now

    Data Assumptions

    This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

    Glossary

    EBIT - Earnings Before Interest and Taxes
    EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
    LTM - Last Twelve Months
    TEV - Total Enterprise Value

    Sources:

    1. Timiraos, Nick. "Fed Raises Rate by 0.5 Percentage Point, Signals More Increases Likely." The Wall Street Journal, 14 December 2022.
    2. "Insurance M&A 2022 review: Deal activity slows from prior-year highs." S&P Global Market Intelligence, 28 December 2022.
    3. "CFPB Orders Wells Fargo to Pay $3.7 Billion for Widespread Mismanagement of Auto Loans, Mortgages, and Deposit Accounts." Consumer Financial Protection Bureau, 20 December 2022.
    4. "SPAC offerings deals fall to pre-surge levels." S&P Global Market Intelligence, 14 November 2022.

     

    Please Share This

    PCE logo

    PCE Investment Bankers, Inc. - member FINRA & SIPC
    PCE Valuations, LLC    |    PCE Advisory, LLC

    SITE MAP

    OFFICES

    [PCE was] completely responsive to our needs and [was] always two steps ahead, leading us expertly through a very complicated process. - Dennis Buhring, Physician Associates

    Copyright © 2023 PCE Companies | Business Continuity | Privacy Policy | FINRA BrokerCheck | Whitelist PCE