The 9 Bankers Behind the Top Bank Mergers and Fintech Acquisitions

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• Last year there were 211 bank-to-bank deals worth a record $77.3 billion. 
• This year, banks are looking to buy beleagured fintechs to bolster their digital capabilities. 
• Insider presents 9 top Wall Street dealmakers ushering in a new era of M&A for financial institutions.

Investment bankers catering to financial institutions have been busy in recent years with a host of regional bank mergers, like BB&T and SunTrust’s roughly $28 billion tie-up in 2019 that formed Truist.

While bank-on-bank activity continues, the winds are shifting in a new direction as financial institutions focus on becoming more technologically advanced. Lenders like JPMorgan and UBS are scouring the universe for ways to enhance their electronic capabilities across key areas like

consumer banking

and wealth management.

As a result, bankers focused on working with banks or asset managers are increasingly occupied with hunting down

digital-payment

providers,

buy-now-pay-later

services, or robo advisors for their financial institution clients to either partner with or acquire.

“Big banks are trying to be more consumer friendly, faster, and speak to Gen Z and more millennials,” said Morgan Borer, a partner at public relations firm Bevel, which represents fintechs. “These banks can access those types of features and acquire fintechs with the user base. It’s a slam dunk, so there’s much more of that to come.” 

Of course, banks’ interest in fintechs has been ramping up for some time. JPMorgan Chief Executive Jamie Dimon has described fintechs as “tough” and “brutal competition.” His bank has made at least 12 fintech and consumer acquisitions or investments since 2020.

Swiss bank UBS acquired automated wealth-management provider Wealthfront for $1.4 billion in January, and in September, Goldman Sachs bought consumer loan fintech GreenSky for $2.4 billion.

Today’s sinking stock market, meanwhile, is likely to accelerate financial institutions’ efforts to tie-up with devalued fintechs that have seen their company valuations go into free fall.

Last year’s frothy public markets enabled fintechs like Robinhood and Nubank to extract billions of dollars from initial public offerings. Fintechs like SoFi also jumped at the chance to go public via 2021’s special purpose acquisition vehicle boom. But both these capital-raising opportunities have become increasingly difficult as tech stocks plunge and investors take a break from SPACs, which have also fallen in value.

“It’s a tale of two cities right now,” Kelly Galanis, the head of fintech for the Americas at Goldman Sachs, told Insider. “Last year was about IPOs, but now it’s more about M&A, corporate carve-outs or take-privates. There’s more to come.”

Tech names like WeTransfer and software unit Justworks postponed share offerings as markets seized up, and trading and savings app Acorns canceled a $2.2 billion

SPAC

deal in January. With valuations slashed, M&A bankers now sense opportunities for traditional lenders to snare fintechs that have shifted their focus from an IPO to becoming a target.

One of the biggest challenges banks have had as they tried to compete from an M&A perspective was the high valuations of tech companies, William Addas, co-head of the financial institutions group at Bank of America, said. But that dynamic could change as values have come down, he told Insider.

“M&A has become a more viable option for private companies seeking

liquidity

,” Addas said. “Given market conditions and the underperformance of recent IPOs, the ability for private companies to access the IPO market is diminishing. That will likely drive increased M&A activity.”

Mortgage lender Better, for example, could be ideal for Wells Fargo or JPMorgan, which both compete with firms like Rocket Mortgage, Insider reported in February.

“There’s a re-emergence of large-cap banks as acquirors of non-depository type businesses. Whether it’s wealth management, asset management, or fintechs,” said Steve Milovanovic, a managing director with Citi’s FIG M&A team. “It’s driven by the digitization of finance and value creation opportunities.”

Bank M&A continues, but regulators sharpen their pencils

So-called FIG bankers can also expect to be kept busy this year with more traditional deals as financial industry players continue to look to expand by teaming up with peers.

Last year there were 211 bank-to-bank deals worth approximately $77.3 billion, a record value, according to data from S&P Global Market Intelligence.

Most activity involved smaller banks, but there were some sizable transactions as well, like Bank of Montreal’s purchase of San Francisco’s Bank of the West from BNP Paribas for $16.3 billion in December. Another international bank, Japan’s MUFG, sold MUFG Union Bank to Minneapolis-based U.S. Bancorp for about $8 billion in September.

“There’s an advantage to scale. What you’ll see is the bigger you are, the higher you are valued by the market,” said Tom Michaud, president and CEO of Keefe, Bruyette & Woods, an investment bank that advises financial institutions. “These are powerful forces that’s driving consolidation.”

Bank-on-bank activity has continued at a brisk pace this year. In January, 17 deals were announced, two more than the same period a year earlier, the S&P data showed.

And last month, Toronto-Dominion Bank announced a $13.4 billion deal for Memphis-based First Horizon Corp, in a bid to grow its reach in the US.

“More folks are looking at banking beyond their regional area. If they consider entering a new region, they’re looking to do so in scale or in a meaningful way,” Citi’s Milovanovic said.

The flurry of dealmaking, however, could slow as US regulators increase their scrutiny on bank mergers. Following an executive order from President Joe Biden last July, the White House is asking regulators, including the

Federal Reserve

, to comb through bank M&A amid concerns that less competition in banking could eventually hurt customers.

To navigate this landscape — changing rapidly thanks to technological advances and enhanced regulatory scrutiny — financial institutions require some of the sharpest minds in M&A.

Here’s nine people from Wall Street stalwarts like Goldman Sachs and Morgan Stanley, to FIG specialists like KBW, which have been at the forefront of bank and fintech dealmaking for decades.

Kelly Galanis, Goldman Sachs

Head of fintech investment banking for the Americas

Goldman Sachs’ Kelly Galanis runs the entire gamut in fintech from payments services to insurance software companies.

She helped Madison Dearborn Partners acquire MoneyGram International for $1.8 billion last month, and reckons the financial services space is ripe for further activity by private-equity firms looking to put their unused capital to work.

“Scale matters, and we’re seeing a lot of players leverage their scale to be in all parts of the ecosystem,” Galanis told Insider. “I think this is going to create more mergers and chessboard moves.”

Last year, Galanis worked on IPOs for Shift4 Payments, software company Duck Creek Technologies, and insurance company Lemonade. Rivals believe her hefty levels of dealmaking over the last two years have her well placed to make partner in the not-too-distant future.

Galanis joined Goldman’s FIG team in 2005 and became a managing director in 2015.

William Addas, Bank of America

Co-head of global financial institutions

William Addas has compiled a hefty list of works across fintech and insurance, among other sub sectors of financial institutions.

He has been a go-to banker for PayPal in recent years, having advised the company on its acquisition of Paidy, a Japanese buy now, pay later company for about $2.7 billion last September.

Addas also worked with PayPal when it sold its US credit business to consumer finance firm Synchrony in 2017.

He joined BofA in 2008 after five years at Deutsche Bank, where he was the head of specialty finance and fintech.

Joseph Berry, Keefe, Bruyette & Woods

Co-head of investment banking

Joseph Berry has been in the thick of FIG M&A since the mid-90s with Keefe, Bruyette & Woods, an investment bank that focuses solely on financial institutions.

He leads the depositories banking group at KBW and is also responsible for the firm’s work in fintech-related banking.

KBW Chief Executive Tom Michaud dubbed Berry as “one of the most productive” FIG bankers on the Street, and that’s no surprise given that KBW has advised on 10 of the 15 largest bank mergers since 2020. This is more than any other Wall Street firm, according to KBW data.

Berry oversaw proceedings for CIT Group’s merger with First Citizens Bank, which wrapped up last month. He also advised First Interstate BancSystem on its merger with Greater Western Bancorp, which also closed in February.

On the fintech side, KBW helped Israeli-based Finaro negotiate a $575 million sale of the company to digital payments firm Shift4 this month.

KBW is owned by Stifel Financial.

John Esposito, Morgan Stanley

Global head of financial institutions group

Morgan Stanley’s John Esposito is one of the first names that comes to mind when rivals think of FIG bankers.

He has made MergerLinks’ top banker lists in recent years, and ensured that Morgan Stanley has been a regular advisor in bank deals alongside rival peers at Goldman Sachs.

Esposito helped Bank of Montreal buy Bank of the West from BNP Paribas for $16.3 billion last year, and advised MUFG on the $8 billion sale of Union Bank to U.S. Bancorp in September.

He also led proceedings for Morgan Stanley in July when it advised regional bank Citizens on its $3.5 billion purchase of Investors Bancorp, the parent of New Jersey-based Investors Bank.

Esposito joined Morgan Stanley in 2004 from Merrill Lynch, where he was a managing director in its FIG team.

Steve Milovanovic, Citi

Head of financial institutions M&A

Like many of his peers, Steve Milovanovic’s career in investment banking has centered around financial institutions.

He joined Citi last September to lead FIG M&A from Goldman Sachs, where he was a managing director in FIG M&A for a little over two years. Before his stint at Goldman, Milovanovic oversaw a raft of deal flow between financial institutions at Credit Suisse.

In nearly 20 years within the M&A universe, Milovanovic has advised banks, insurance companies, asset managers, and

fintech companies

.

He has worked on deals for General Electric, including selling the conglomerate’s commercial-lending business to Wells Fargo, and helped sell its transportation-finance business to the Bank of Montreal in 2015.

Gary Howe, Bank of America

Co-head of global financial institutions group

Looking back at some of North America’s biggest bank M&A, there’s very few that did not involve Gary Howe.

He led proceedings for MUFG’s roughly $8 billion sale of Union Bank to US Bancorp last year, and advised PNC on its approximately $11.6 billion purchase of BBVA’s US business, which closed in June 2021.

Howe’s a believer that scale and size are critical for banks’ profitability, so he’s confident that the US market is ripe for further consolidation, especially among the country’s mid-sized financial institutions.

“From the buyer’s perspective, scale and size are critical determinants of a bank’s market position,” Howe told Insider. “I expect a steady drumbeat of mid-sized deals in the $1 billion to $6 billion range.”

He joined BofA in 2019 from Lazard where he was its head of North American financial institutions for eight years. Before that, Howe co-led FIG for the Americas at UBS for almost six years.

Howe and William Addas, who was featured earlier in this list, co-lead Bank of America’s FIG offering out of New York. The pair also work alongside Giorgio Cocini, Bank of America’s third global co-head of FIG, who is based in London.

Jared Kaye, JPMorgan

Co-head, global financial institutions group

Like his peers at Goldman and Morgan Stanley, Jared Kaye has been in the FIG business for over 20 years, having joined JPMorgan in 2001.

He worked on HSBC’s exit from US

retail banking

, which involved sales to Citizens Bank and Cathay Bank. That effort, announced in May 2021, wrapped up last week.

Kaye was also an advisor to Toronto-Dominion Bank on its $13.4 billion purchase of Memphis-based First Horizon last month.

Kaye was promoted to a global co-head of FIG last June. Before that, he was the co-head of North American financial institutions.

Eric Neveux, Goldman Sachs

Partner, co-head of investment banking for the midwest, head of Americas banks and specialty finance

Eric Neveux is from one of Goldman Sachs’ more recent vintage of partners, having been promoted to the coveted title in 2018.

He’s been at the bank since 2001, and today leads Goldman’s specialty finance arm, which focuses on less-traditional lenders like Quicken Loans or mortgage provider Better.com, for example.

Rivals reckon Neveux is fast-becoming one of the most prominent bankers on the Street for financial institutions due to his deep relationships with traditional banks, and his growing exposure to fintechs across the specialty finance space.

Neveux led proceedings for Goldman’s acquisition of GreenSky last September, and worked on the SunTrust and BB&T merger that created Truist back in 2019. He also advised BNP Paribas on its $16 billion sale of Bank of the West to BMO last December.

George Boutros, Qatalyst Partners

CEO

George Boutros has for decades been described as one of Silicon Valley’s more colorful dealmakers.

And now he’s inching closer toward traditional bank M&A turf as financial technology permeates the sector.

“I’m having to keep my eye on them a lot more these days,” one rival FIG banker said of Qatalyst. “Boutros in particular, is very visible in fintech.”

With the rise of fintechs and traditional banks’ desire to partner with the upstart tech firms, insiders reckon they’re going to see a lot more of Boutros at the negotiating table.

He advised Afterpay on its $29 billion sale to payments company Square last August, a substantial transaction that put Boutros on Insider’s M&A Rainmakers list last month.