Bank deals take a long time to percolate, he said. "We're already talking to people in this market that we like a lot," he said, declining to name names.
Bank observers long have pegged Chicago as overbanked and ripe for consolidation. Despite a couple of good-sized deals last year (MB Financial's purchase of Cole Taylor Bank's parent and U.S. Bank's acquisition of the Charter One franchise in Chicago), the long-predicted bank merger frenzy many forecast following the Great Recession has yet to materialize, surprising some in the industry.
Bankers often grumble about the intense competition for loans that reduces the interest they can charge, but out-of-state banks find the Chicago market enticing because, unlike many other markets, there isn't a single, dominant player.
BUT WHAT ABOUT THE DOWNSIDES?
King finds the Chicago market attractive and isn't scared off by the fiscal issues plaguing the state and city governments. He believes a coming resurgence in U.S. manufacturing, as well as trends favoring agriculture as other parts of the world see a growing demand for food, will serve the Midwest well.
Chicago, he said, "will be stronger in the next two decades than it has been in the last two decades."
And what about those terrible budget deficits at the state and local levels and multi-billion-dollar pension shortfalls?
"The fact that governments have challenges can subdue growth, but it can't stifle it," King said.
From Crain's Chicago Business
Why this out-of-town banker is bullish on Chicago
By Steve Daniels
It's not going to happen tomorrow, but Chicago's crowded banking market looks like it eventually might have to make room for another big player.
Winston-Salem, N.C.-based BB&T, the nation's 12th-largest bank by assets, has long-term designs on a retail entry into the Chicago market, according to CEO Kelly King.
BB&T already employs more than 100 in the Chicago area, with a group of business bankers and capital markets personnel here, as well as insurance brokerage CRC Insurance Services, which has a significant local presence. The bank also has workers doing commercial mortgages and financing insurance purchases for big companies.
King, in town recently to give a keynote address at the Federal Reserve Bank of Chicago, runs one of the nation's most acquisitive banks. BB&T is in the process of entering the Cincinnati market through a deal with a Kentucky bank, as well as mid-Atlantic markets north of its Southeast stronghold through a $2.5 billion deal for Lititz, Pa.-based Susquehanna Bancshares.
King said his ultimate goal is to serve Chicago and all of the eastern half of the U.S. excluding the Northeast. Even before the Kentucky and Pennsylvania deals, BB&T has retail operations in 15 states and $187 billion in assets.
"Over the long term we'll have a footprint that will run from Texas through the Midwest, topping out in Pennsylvania," he said in a recent interview.
'NOT THE NEAR TERM'
He makes clear, though, that BB&T isn't hunting for Chicago deals right now. “Over the long term, we will (be in Chicago), but not the near term,” he said.
But banks like BB&T that are aggressive acquirers don't always get to choose the timing of their market entries, he acknowledged.
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