Bank Mergers: 10 Top Tips for Professional First Meetings (Part 2)

We spent time in the last newsletter (The Savvy Banker 029) discussing the first of the top 10 tips for first meetings between you and a potential buyer. Today, we’re going to focus on top tips two through ten.

We focused on the importance of moving the potential buyer(s) from the “interest stage” to the “desire stage.”

Everybody is counting on you to deliver.

You’ve never done it before.

You don’t know what quite to expect.

Or, how to prepare.

“You never get a second chance to make a first impression.”

You have an opportunity for a preview of what that meeting will look like.

I am going to continue walking you through it so that you can handle it like a pro.

Tip #2 – Your Homework

You know who your meeting(s) is with, so do your homework on their operation prior to the meeting.

None of this information may come up in the first meeting but do your homework so you can begin piecing together your picture of the acquirer.

Even if you have known the acquirer for some time, you are most likely approaching this from a completely different angle and will want to get as much of a picture in your mind as possible.

A good investment banker will provide you with a packet of information on the prospective buyer well in advance of your meeting so you can be informed on the public data available on the institution.

Search the Internet for articles on the person you’re meeting with to gather as much insight as you can.

Research social media accounts on the person you’re meeting with as well. Both personal accounts and business accounts.

Look for articles on any acquisition they have made recently.

See what the quotes from the leaders are focused on.

Search the Internet for information on the owners, or ownership.

Search LinkedIn for employees you may be familiar with.

If you have a subscription to S&P Global, or your investment bankers do, look up their ownership and ownership percentages so you can possibly determine who the decision makers are.

You will find this information, if the potential buyer has a holding company, by requesting a copy of their FR Y-6 report (Annual Report of Holding Companies) filed with the potential buyer’s supervisory Federal Reserve Bank. Going this route is a laborious process, and you must wait for the information to be physically mailed to you. The S&P Global route is much easier if you have access to it.

Once you have a copy of the FR Y-6, research the individuals in the report for any information that may provide insight as to the buyer’s plans. That insight could show you that the bank is a small part of the majority shareholder’s holdings, possibly indicating the bank is more likely to be a long-term hold.

It could indicate the opposite as well, that the investment in the bank represents the bulk of the majority shareholder’s wealth. If so, it may lead to asking questions down the road related to how the majority shareholder plans to liquidate their holdings (this is a question for consideration after offers come in and you are deciding between options, and if it is an all-stock or a partial stock transaction).

There are no certain answers here, but there are clues that can lead you to asking questions that could reveal more clues. Those clues can aid in finding the motivation for their interest and your ability to position for more value.

If they are publicly traded, look at their most recent filings, 10-K and/or 10-Q for any added insight you may gather.

Tip #3 – What to Ask/Share and What Not to Ask/Share

Your meeting will likely be of a higher-level, get-to-know-your-style kind of meeting.

That means it’s not the time or place for them to delve too deeply into any non-public information with you.

Your investment banker may step in if the meeting is headed that way, but it has been my experience that the buyers know NDAs have not been signed and that level of conversation isn’t appropriate yet either.

If the conversation does go in that direction and your investment banker is not there or doesn’t speak up, just politely let the person know you’ll be happy to provide that information when NDAs have been signed and it’s appropriate.

Types of questions about large customers or specifics about strategies and/or pricing or details on key personnel are the kinds of questions I am referring to.

Tip #4 – Strategy Conversations

Conversely, don’t expect to hear the strategies and inner workings of the potential acquirer either. Again, this is a “get-to-know-you” meeting.

You can push for some answers to see how accommodating they may be with information but do so politely and back off at any sign of discomfort with your questions.

You don’t want to turn them off.

Tip #5 – Don’t Judge

Keep in mind that you are not being judgmental about them in any way.

The whole purpose of this meeting is to earn another meeting.

There is time later for making decisions between potential acquirers later.

Now is not that time.

It is okay to have judgments, share them with your investment bankers, note them for later consideration, but don’t dismiss any interested party at this point.

It’s too early for that, there will be an opportunity to bring it back into the discussion later.

Tip #6 – Know Your Pitch

If you don’t come from a sales background, you need to practice your story.

Practice it until you can say it in your sleep so you can recognize cues you may be getting from the acquirer.

Watch for those cues on when to add more or when to move on.

You need to know how to time a break when they are engaged and want to ask a question, so you don’t lose that engagement.

During my sales days, I was taught that when the customer is nodding their head yes when you’re talking, hand them the pen and shut up.

The advice was, you have answered the questions they were looking for, so it’s time to move on.

The last thing you want to do is to drone on and turn a yes into a no.

Practice it with your investment bankers if you need to.

They have been involved in hundreds of these conversations.

They know how to read them.

Take their advice between meetings and don’t take offense if they tell you to change something.

There is a lot riding on these meetings.

If you are the chairman or CEO and your president is more of a salesperson than you are, you may wish to have them in the meeting providing that piece of information with you stepping in to answer questions periodically.

The one-on-one meeting is more art than science.

If it’s not your strong suit, figure out how you will make accommodations for that.

A copywriter I have high regard for says, “The job of the first sentence is to get you to read the second sentence. The job of the second sentence is to get you to read the third, and so on.”

When he is asked how long the copy needs to be, he says you need to say enough to get them to buy and not one word more.

This is simply another reference to keep in the back of your mind while going through this process.

Avoid oversharing, but you do have to provide enough to keep things moving in the right direction.

Your sole focus at this point is to arrange for another meeting.

Tip #7 – They’re Interested, That’s Why You’re Meeting

Remember they are interested in meeting you, or if you’ve met prior, learning more about you and your bank, that’s why they’re there.

Tip #8 – Think “Do and Become,” Not “Have and Get”

They are thinking “Do & Become” so you need to know the answers to:

• Why do you want to sell?
• Will your employees stay?
• Will your customers stay?
• Why would joining us work?

Tip #9 – Culture Conversations

They will politely listen to you discuss your culture; they will want to hear about it at least once to see if it meshes with theirs.

Beyond that they have their own culture.

They are not looking for somebody to come in and change it.

That’s something you need to be respectful of.

I know your job is likely the keeper of the culture and you will naturally want to go there.

Go there once.

Then listen when they talk about their culture, nod, and agree.

Now is not the time for anything other than that.

Tip #10 – Be Yourself

All of this being said, the most important thing is to be yourself and enjoy the meeting.

If you’re not ready to be yourself and enjoy the meeting, figure out how you’re going to get there and get working on it!

And remember… You’ve got this

Action plan:

• Unless you have specific meetings coming up, focus your efforts on Tip #1 – Meeting Logistics & Agenda, and Tip #6 Know Your Pitch.
  • It’s never too early to start. Tomorrow is not a day of the week. Take the time now to do it so you won’t have to be under pressure down the road. Practice it in your car when you are alone on a drive.
  • Know your pitch cold. If you get interrupted during the meeting, you will know how to get back to where you were without too much effort. It allows you to pay attention to cues and body language.
  • Keep it tight. Interesting, but tight. Don’t try to cut it so tight you forget about the interesting part. It’s a balance.

There are zero hacks or tricks in this newsletter. Just proven tactics that help you choose the right path for your bank.

Your path will:

• Inform your strategic plan.
• Guide your annual business plan and budget.
• Clarify priorities.
• Define your message so it can be communicated with confidence.

This is how savvy bankers navigate.

They build smart and valuable banks and choose the best time to sell – serving the needs of the shareholders and the board.

I hope you found this short lesson helpful.

What are your thoughts?

I’ll see you next week.