SOURCE: Capital Insight Partners

Capital Insight Partners

June 16, 2010 10:10 ET

Consolidation of Midwest-Based Banks Appears Necessary; New Super Community Banks to Be Born, According to Newly Released Capital Insight Partners Market Reports

CHICAGO, IL--(Marketwire - June 16, 2010) -  Capital Insight Partners, an investment bank and M&A expert specializing in community banks with up to $3 billion of assets, today announced the release of reports detailing banking and economic conditions in four Midwestern states: Ohio, Minnesota, Wisconsin and Missouri. A report on Colorado was also made available. Key findings: while institutions that stayed with banking basics during the recession have remained well-capitalized, the need to consolidate to combat increased operating costs and remain competitive with mega banks is a virtual necessity. Free copies of the reports are available for download at http://www.capitalinsight.com/investment-banking/.

Capital Insight regularly develops and updates in-depth reports on numerous states and regional markets, providing detailed breakdowns of banking and economic conditions in specific sectors of each state and, when appropriate, specific information about major metropolitan markets. By making these reports publicly available, the firm provides critical information to community bankers, current and potential bank investors, stakeholders and media.

"Providing a clear snapshot of markets and the prevailing environment for banks of all sizes has received very positive response from community bankers and investors," explained Eliot Stark, managing director and head of investment banking for Capital Insight Partners. "It's particularly difficult to obtain information specific to the sub-$5 billion asset community bank sector, so by gathering this information, we believe we're providing a valuable service.

"Now that the dust of the past two years has settled slightly, a great many community bankers are giving serious consideration to strategies for success and growth in the coming years. We've been working with bankers to make those tough decisions and identify the strategies and capital needed to execute a plan."

Community banks face serious competitive pressures both from their peers and larger institutions, particularly with FDIC insurance premiums that have skyrocketed. In addition, most Midwestern markets have modest growth prospects for the coming years. The reports clearly point to the conclusion that for many smaller banks, the best potential to survive, thrive, and compete with mega banks in an era of substantially higher operating costs is to consider merging with other institutions and help create more balanced and efficient institutions.

"Smaller community banks can merge as equals to gain size and scope, yet still maintain the fundamental principles and practices of community banking, such as a focus on local markets, personal service, and lending support to small and midsize businesses," noted Stark. "Larger financial institutions in these states, and others, have been distracted by asset quality issues and a focus on very large customers and banking relationships. Community banks have an attractive niche to address.

"Investors looking to help finance this growth are seeing the opportunity. They are moving forward, albeit cautiously, looking to back banks, boards of directors and management teams with strong track records and a high likelihood of taking their companies to the next level."

Capital Insight Partners continues to develop in-depth analyses of numerous markets; particularly ones it believes are ripe for consolidation. The company works with community banking clients and on behalf of hedge funds, family offices, and private equity groups that invest in community banks throughout the country.

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