World’s Best Investment Banks 2020: US Regional Winners

Banks across the US have been making moves, cutting deals and merging. Global Finance announces the country’s best regional investment banks.

The number of US merger and acquisition (M&A) transactions during 2019 totaled 5,757, reaching a value of $1.53 trillion, according to the report Ahead of the Pack: US M&A 2019 by law firm White & Case. Despite a 10% drop in volume, deal value remained about the same as in 2018, making 2019 the third-highest year on record.

The number of deals valued at $5 billion or more accounted for the lion’s share of total deal volume in 2019, at 58%, up from 47% a year earlier. Conversely, the volume of mid-market deals dropped from 24% to 18% over the same time period, the report notes.

By sector, technology, media and telecommunications (TMT) led the pack in both deal volume and value, with 1,377 deals worth nearly $280 billion, the report said. Drivers included the ongoing interest in software-as-a-service (SaaS) and “healthtech,” or technology designed to serve healthcare needs more quickly and efficiently.

Regional Banks Build Bonds With Customers

When it comes to M&A, regional banks typically have a small team that provides advisory services. Their goal is to work with their business customers from “cradle to grave,” says Chris Marinac, director of Research with financial-services firm Janney Montgomery Scott.

Many of these banks begin working with companies as lenders, eventually adding cash management and other treasury services. As companies grow, banks provide advice on mergers, acquisitions or divestiture. Offering this capability, even on a one-off basis, adds incremental revenue, Marinac notes. With interest rates languishing, many banks look to build fee revenue.

In addition, many regional banks have expertise and credibility within their geographic markets. “If you go to, say, Louisiana, the businesses there aren’t always ready to have a New Yorker tell them how to run their businesses,” says Jonathan Shiery, a director in the Banking, Insurance, and Capital Markets practice with Guidehouse, a global consulting firm. “Regional banks know the community.”

Regional banks looking to enhance their mergers and acquisitions expertise often prefer to “buy versus build,” Marinac says. Purchasing a boutique M&A firm tends to offer a faster payoff than building the expertise internally, he adds.

US Bancorp Wins Top Marks

Stephen Philipson is managing director and head of Fixed Income and Capital Markets (FICM) with US Bank, where he oversees all sales, trading and origination, as well as risk and funding for the FICM businesses, including capital markets. The Minneapolis, Minnesota–based bank earned Global Finance’s award as the Best Investment Bank for the Midwest region. US Bank provides financing for acquisitions in the loan and bond markets, as well as advisory services around capital structure. “We are key partners to our clients over the past ten years in financing and managing hedging risks associated with acquisitions,” Philipson says. 

Within its client base, the banks sees a strong pace of “bolt-on or tuck-in” M&A, according to Philipson. Several drivers are behind this trend. “Given an attractive financing environment and a slower growth backdrop, clients are finding opportunities to enhance their product offerings, geographic footprint and/or distribution,” Philipson explains. The goal? To build a more diversified revenue base, which can add value for shareholders and help the company better weather any potential downturn.

Last year, US Bank led bridge-loan financing as well as the bond take-out on a deal to finance an acquisition for a technology solutions provider. “This was a good example of the evolution of US Bank’s business,” Philipson says. The bank has known the client and its management team since they opened for business more than 35 years ago. “When they made this transformational acquisition, we were there to help them finance it,” Philipson says.

Banks As Part of the Deal

In something of a twist, many regional banks are making their own acquisitions. Often, the deals are to help them boost their technology offerings, Guidehouse’s Shiery says. “The goal is to acquire capabilities—talent, skills and actual technologies.”

One example of this is US Bank’s 2019 acquisition of Talech, a software company that helps small to medium-size businesses simplify operations and improve decision-making through an integrated point-of-sale system, according to a release. 

M&T Bank, based in Buffalo, New York operates across northeastern United States and is our pick this year for the region. In October 2019, the bank, which has $120 billion in assets, invested $5 million in Blue Highway Capital, a growth equity fund created to jumpstart the growth of small companies in rural communities. 

MidFirst Bank, with about $23 billion in assets, is one of the largest privately owned banks in the United States, and our pick this year for the Southwest. MidFirst Financial Credit (formerly Presidential Financial Corporation) provides lines of credit of up to $30 million for acquisitions or other strategic needs.

In December 2019, Raymond James acted as co-manager for a secondary public offering by Phreesia, Inc., a patient intake management platform, of six million shares of common stock. Raymond James Financial, this year’s winner in the Southeast, is a diversified financial services company with total client assets of $825 billion, and offers advisory practices in middle-market investment banking.

In September 2019, S&T Bancorp, Inc., the holding company for S&T Bank announced it had received all required regulatory approvals for its acquisition of DNB First National Association. S&T Bancorp, a $7.3 billion bank holding company, is headquartered in Indiana, PA. S&T is our pick for the Mid-Atlantic region.

As regional banks enhance their technology platforms, they face a new dilemma: implementing the efficient but impersonal technology with the highly personalized service that is among their competitive advantages. “Their calling card is in the relationship with their clients,” Shiery says. They need to continually balance providing high tech with their high-touch approach, while managing profitability. Data is one key to pulling this off, Shiery says. The banks need to distinguish betwen profitable and unprofitable clients, so they can focus their attention and energy in the areas where they can draw the greatest value. 


Northeast M&T Bank
Mid-Atlantic S&T Bank
Midwest US Bancorp
Southwest MidFirst Bank
Southeast Raymond James