SBA strength a drawing card for acquirers

Small Business Administration (SBA)-backed lenders tended to bring premium prices upon acquisition in 1994, according to an American Banker survey. The SBA has made the procedures of the 7(a) loan program more simple and more accessible to banks, and many banks are considering the increasing demand for such loan portfolios as good reason to participate in the 7(a) program. The purchase of North Texas Bancshares by First Interstate Bancorp is one of the largest acquisitions of a 7(a) loan portfolio. The Bank of North Texas generated 7(a) loans worth almost $94.1 million in 1993-94.
Are Small Business Administration-backed lenders worth more to would-be acquirers? The answer appears to be yes. An American Banker analysis shows that 1994 acquisitions of banks with a heavy orientation [...]