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W W W. M A I N E B I Z . B I Z 11 JA N UA R Y 2 1 , 2 0 1 9 Could 2019 see more bank mergers? B y P e t e r V a n A l l e n M aine's banking community has been relatively stable in recent years, without a lot of major upheaval from bank mergers. But there are a growing number of reports specu- lating that we could see a return of regional banks getting snapped up by larger competitors. Corporate tax reductions have given companies more cash. Some of the most stringent bank regula- tions that came out of the 2008 financial collapse could be scaled back, so that banks with assets of $250 billion or less would be subject to less scrutiny than in the past. "The floodgates could open for larger banks to make big deals," Yahoo Finance reported. David Wright, managing director of Deloitte's bank- ing regulatory practice, told Yahoo Finance he has had conversations with banks between $50 billion and $200 billion on preparing for future mergers. The four out-of-state banks with the largest presence in Maine are TD Bank ($244.1 billion in assets), KeyBank ($105 billion), Bank of America ($1.3 trillion) and People's United ($31.4 billion). (The largest Maine-based banks are in the neighborhood of $4 billion in assets.) "We know that there are regional banks that are actively preparing to be able to execute if and when the numbers work for them," Wright said. Ernst & Young LLP also issued a repor t cit- ing the possibility of more banking deals this year, fueled by easing regulations and the U.S. tax over- haul, Bloomberg reported. Rural banks could be at risk Another report, by the American Bankers' Association's Banking Journal, also addresses the likelihood of more bank mergers this year. "As larger banks focus their efforts on metropolitan and suburban markets, an opportunity has arisen for well-performing smaller banks," according to the ABA report, which was published in December. "Many of these banks are situated in exurban and rural markets and are armed with a wealth of well-priced and stable deposits. With this solid funding base, these banks will look to move into suburban markets through acqui- sitions of banks that are either too small to attract attention from more established acquirers or that prefer the opportunity of combining with a smaller, community-oriented institution." But the report, which was compiled by Jonathan Hightower and Robert Klingler of Bryan Cave Leighton Paisner in Atlanta, also points to another area that could have particular significance in Maine: Rural banks or banks with a strong rural presence. "Many of us have observed with considerable trepi- dation the plight of small, rural banks situated in markets with declining populations and deteriorating economic outlooks. These banks are now surviving on the margins, focusing on efficiency to enhance operating results. While such tactics can result in acceptable earnings and risk profiles, opportunities for a liquidity event through a sale transaction appear bleak for many of these banks," the ABA report states. With those words, we'll see what 2019 brings the banking industry in Maine. B I Z M O N E Y As larger banks focus their efforts on metropolitan and suburban markets, an opportunity has arisen for well-performing smaller banks. — Jonathan Hightower / Robert Klinger Bryan Cave Leighton Paisner Read the entire ABA Banking Journal report at: https://bankingjournal.aba.com/2018/12/ mergers-acquisitions-outlook-2019 Find out what believing can do for your business. Discover products and services designed to help Maine businesses thrive. (207) 221-5527 | GorhamSavings.Bank/Business Our mission is to inspire and enrich the community by promoting ingenuity, creativity, innovation, and the diffusion of useful knowledge. Maine Charitable Mechanic Association, www.mainecharitablemechanicassociation.com, is a 200-year old non-profit membership organization located in Mechanics' Hall, a historically significant building in the heart of Portland's Arts District. Mechanics' Hall houses a lending library, a grand ballroom, classrooms, and flexible community space. The Hall is a center for the cultivation and presentation of arts, crafts, and innovation. The Board of Directors seeks an executive director who is passionate about making our mission relevant in the 21st Century, with the skills and vision to effectively develop community programming and recruit and support membership. Responsibilities include marketing, fundraising, and the management of the Hall and a small staff. Executive Director Sought Maine Charitable Mechanic Association Deadline for applications: February 28, 2019 If applicants have questions regarding the position they may call or email either: Pamela Plumb, President ppplumb1943@gmail.com / 207-772-2680 George Burns, Chair of Search Committee gburns@bernsteinshur.com / 207-318-7068. We ask applicants to send resumes and cover letters with qualifications and the names of two references by mail to: George Burns, Chair of Search Committee Maine Charitable Mechanics Association 519 Congress Street, Portland, Maine 04101 And by email to: gburns@bernsteinshur.com or

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