Bank Mergers: How to Manage the Emotional Shift of a Bank Merger

Following the announcement of the signing of the definitive agreement and the upcoming merger, you will notice a subtle emotional shift from your customers and employees.

It’s normal and expected, but it is almost immediate.

It can be a bit of a surprise at the swiftness of the shift, but again, when examined from a distance it is entirely normal.

That shift is in the fact that you are now not viewed as the “final word.”

Although the merger hasn’t officially closed, in a de facto way it has.

It’s important to understand, and it is something you’ll have to navigate.

As has been said many times now, the deal isn’t done yet.

Until the deal is done, there is always a possibility it may not get done.

You will need to navigate this time in the same spirit as conveyed in your announcement comments.

Respectful, positive, collaborative, and forward-thinking, but with distance as well.

The distance is preventative so that a retreat from the position is still workable until the deal is closed.

You’re in a tricky position because you may or may not have a role going forward, and you might not know the answer to that question yet.

This may or may not have been spelled out in the LOI.

Or, it may have stated you’re still going to be involved but does not address the level or manner in which that will take place.

You will be compensated according to the Stay-Put, if one is in place, but that period of time may be shorter than listed.

That’s okay; that’s the buyer’s decision and they paid for the right to that decision.

The buyer, your potential new employer, may never have been in this position before.

It’s possible they may view you as being aloof or not caring about the new organization or as disengaged.

That isn’t the case.

By defense, as the leader of your current organization, you must do this—it is part of your fiduciary duties.

Your fiduciary duties are not relieved until the shareholders receive their money.

Your team will be meeting with their future leaders and will be leaning towards the future in their words and actions.

This is what your team needs to do as well.

There likely will be times when they know more about the future direction than you do and that will be very strange since you were always a part of defining the future.

Your team needs to know what the future holds, not only on their own behalf, but on the customers’ behalf too.

The customers want to know what the future holds.

The employees are the eyes and ears of the customers.

The employees need to be able to communicate that picture of the future as positively and as clearly as they can.

The buyer ultimately is the only one who can paint that picture.

That means it’s the buyer’s responsibility to provide as clear a picture for the employees as possible.

The future is their vision.

Not your vision, their vision.

If that picture is confusing, it will lead to losing employees and customers.

This communication must be the highest priority the buyer has, but sadly, it often isn’t.

If this is the case, the only advice I can provide is to encourage your team to stay positive.

Let them know these things take time, and advocate for them where you are able.

Employees, by reflex, will be looking to you for answers.

It is important to communicate there are answers you cannot supply and that you are hopeful responses to questions will be supplied soon.

The only thing you can do is ask them for faith and patience that the answers will be coming soon.

Our number one goal is to make things run as smoothly as possible so that our customers are taken care of.

We all need a periodic reminder that if the customers aren’t taken care of, we all lose.

This requires understanding, patience, and diplomacy as you continue to grind towards the finish line of getting the merger closed.

It could be easy for a leader to disengage during this time.

You will feel a sense of loss, which is natural, and it requires being the ultimate professional and seeing things through.

Leaders lead.

Keep your eye on the ball and support the team.

Action plan:

• It is important to think through this scenario. Years in advance, if possible. The longer you have preparing for your exit, the less likely you will be to experience melancholy.
• Explore things you may be interested in. Be introspective. Think about what you care about and what you don’t. Think about the amount of money you would be happy to walk away with when the time comes, along with a time frame.
• Start to view the bank with some healthy detachment. Be objective – make a list of what needs to be built into the qualities and characteristics that will maximize its value and allow you to have the kind of exit you want.
• Break down the list you made from the last action plan step.
  • What can be accomplished in the time frame you’re thinking of?
  • Prioritize the list starting with what impacts value the most.
  • Can the projects on the list be worked on simultaneously, shortening the time frame of making the changes?
  • Can each of the projects be broken down into “chunks” to make them more manageable?

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.