Intel Report Core Replacement - Flipbook - Page 6
U.S. bank deal statistics
The rate and size of M&A activity in banking from 2018 to YTD 2021
Total deal value ($B)
Assets sold ($B)
Deposits sold ($B)
Median deal value to tangible common equity (%)
406.73
$425B
200%
$375B
314.04
$325B
$275B
161.12
$175B
$125B
175%
235.92
220.45
$225B
$75B
294.28
274.38
128.83
150%
125%
54.81
29.56
38.95
27.75
$0
100%
2018
2019
2020
YTD*
Number of deals (actual):
Number of deals (actual):
Number of deals (actual):
Number of deals (actual):
244
244
103
132
* Year-to-date through Aug. 31, 2021
Source: S&P Global Market Intelligence
compiled by S&P Global Market Intelligence. That activity
via a split-core design. First Horizon Corp. did this after
has bounced back in a significant way, with 132 mergers or
acquiring IBERIABANK Corp. and moving IBERIABANK’s
acquisitions announced through August at a value of $294
VirtualBank to a new core by Finxact.
billion in assets sold, surpassing all 2020 activity.
When a merger occurs, the conversion of the core becomes
almost a necessity. If one bank’s system can’t speak to
the new bank’s core, then the newly combined organization would essentially operate with two languages and no
interpreter to send data across the two entities. This would
hinder integration and using the shared data for initiatives
Many banks are taking a look at their options for a full conversion, partial conversion or some hybrid.
This report provides a detailed look at what to consider
when replacing your core, enabling it to reach your modernization goals. It may not be rocket science, but it’s the financial sector’s equivalent of a rocket ship.
across the institutions. Historically, this would result in inte-
Having the right plan can help that first step feel simple,
grating the acquired bank’s data with the acquirer’s core.
instead of monumental.
But now, with the growth in core options and the upgrades
that banks can gain from replacing the core, the possibility of moving the cores to an entirely new one has become
viable. Or it has given banks opportunities to test out new
cores with a piece of business from the acquired company,
4 | FINXTECH INTELLIGENCE REPORT
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