Stephens Inc. landed its 16th bank M&A assignment of 2022 and its largest in Illinois in five years with a buy-side financial advisory role on Byline Bancorp Inc.'s $165.0 million deal agreement for Inland Bancorp Inc.
With the engagement, Stephens affirmed its second-place ranking in the S&P Global Market Intelligence bank M&A league table as of Dec. 6, based on number of deals. Through that date, Stephens trails Piper Sandler & Co.'s 37 transactions and is just above the 14 deals from Stifel Financial Corp. unit Keefe Bruyette & Woods Inc.
Across the industry, the number of bank M&A announcements has dropped in 2022 from 2021, a year in which Stephens finished third in the league table rankings, nearly 20 deals behind second-place finisher KBW.
The Byline advisers
In some of Stephens' assignments, investment bankers who cover different regions worked together, which is not always commonplace in the highly competitive investment banking business. Two of the Stephens managing directors on the Byline deal were Jim Hemmer, who has covered banks in the Midwest for more than 20 years, and Frank Sorrentino, who joined the company in 2019 and is responsible for investment banking coverage of Northeast banks and thrifts. However, Sorrentino has also worked on deals in various parts of the country including the Midwest and western Pennsylvania. Sorrentino advised Pittsburgh-based TriState Capital Holdings Inc.'s roughly $1 billion sale to Raymond James Financial Inc. that closed in June, and Sandusky, Ohio-based Civista Bancshares Inc. on its $50.2 million acquisition of Comunibanc Corp. that closed in July.
Hemmer is based in Chicago and joined Stephens in 2015 from Sterne Agee & Leach Inc. Hemmer has covered banks in the Midwest at other investment banks such as Robert W. Baird & Co. Inc. and Sandler O'Neill & Partners LP. Some of Hemmer's more recent notable assignments include advising Muncie, Ind.-based First Merchants Corp. on its $332.3 million acquisition of Farmington Hills, Mich.-based Level One Bancorp Inc. that closed in April and Manitowoc, Wis.-based County Bancorp Inc. on its $218.1 million sale to Green Bay, Wis.-based Nicolet Bankshares Inc. that closed in December 2021.
Byline connection
In 2017, Stephens was one of the underwriters on Byline's initial public offering, but the investment bank had not previously worked on an M&A deal for Byline, which used KBW on its previous three acquisitions. Byline President Alberto Paracchini recalled in an interview that Stephens helped the bank develop the idea that led to the Inland transaction.
"So we decided [to work] with them on the transaction," Paracchini said.
The deal marks the third-largest financial advisory assignment for Stephens involving a bank target based in Illinois. The largest was First Community Financial Partners Inc.'s approximately $240 million sale to First Busey Corp. in 2017, followed by Centrue Financial Corp.'s about $170 million sale to Midland States Bancorp Inc. in 2017. Jeffrey Jones advised on both of those deals, but left the company in 2019 to become First Busey's CFO.
The Inland acquisition won't preclude Byline from pursuing another transaction, analysts said. More M&A would provide investment banks with the opportunity to win more financial advisory assignments.
"We have a relationship with a number of investment banks," Paracchini said.