Craving Fee Income, More Banks Pursue Nonbank Acquisitions
More banks are pursuing nonbank acquisitions as they hunt for new sources of income at a time when rock-bottom interest rates are suppressing revenue from lending. Though traditional merger-and-acquisition activity has picked up of late, some banks are steering clear of buying other banks, instead eyeing deals for asset managers, insurance firms and other businesses that generate the bulk of their income from fees. United Community Banks in Blairsville, Georgia, for example, this month agreed to buy FinTrust Capital Partners, an investment advisor in Greenville, South Carolina, in a deal that will more than double its assets under management. These types of acquisitions are not new, but banks are clearly interested in doing more of them in an effort to boost profits.