[quote=Arraya]
Still, that loss-share program is a guaranteed profit program [/quote]
It is NOT a “guaranteed profit program,” as I explained above. The bidders can still lose money. And some no doubt will.
Having said that… at least the first 18 months of deals appear to be very favorable for the acquirers despite a competitive bidding process. However, I just got back from a banking conference and the general consensus was that the bidding is getting much more competitive (which is what I’m seeing firsthand) and that within 6-12 months the most attractive deals (for the acquirers from a pricing perspective) will be exhausted. This is good for the FDIC Insurance Fund because it indicates they will be getting better pricing in general going forward. There is a LOT of capital that has entered the fray for FDIC-assisted deals over the last 6 months and more is coming down the pike (several banks I’m involved with have raised such funds). So, it’s going to get much more competitive very quickly. Which is good for the entire system.
