When you bring serious people to the table, you are signaling to your potential buyer pool,
“We are serious.”
Your advisor team are the serious people you are bringing to the table.
Your investment banker, your lawyer, and your accountant.
For those who may...
In 2017, our bank was eleven years old.
Our loan-to-deposit ratio was running consistently at 100%+.
We had $40 million borrowed on our Federal Home Loan Bank (FHLB) line of credit.
We had $60 million in bonds that we were holding in an unrealized loss position in at the time.
The...
Every day as a bank CEO, you struggle to balance plates on sticks.
Competitive threats, talent management, management succession, asset quality, liquidity, cybersecurity threats, interest rates, regulatory compliance, regulatory overreach, capital planning, along with customer and...
As a bank CEO you are familiar with acting as a fiduciary.
We all can become “house blind” to the specifics of those duties.
Reviewing the fiduciary duties of good faith, care, and loyalty are helpful, especially when selling the bank.
Directors should ensure they are...
In Part 1 of this newsletter, we discussed the importance of making yourself replaceable as CEO.
That requires hiring the right people, developing them, and protecting your investment of time and resources.
You have perhaps kissed more than your fair share of toads along the...
Your job as the CEO is to make yourself replaceable.
You do that by hiring the right people to keep the company going without you.
Don’t get me wrong, you have unique and specialized talents like being a visionary, being adaptable, being a motivator, and being receptive...
Banks are bought, not sold.
They are bought because the buyer thinks the value of their bank will increase with the addition of your bank.
The buyers aren’t as interested in the past as they are in the future.
Finding the areas where the combination of two banks creates...
If you could pick a time that presents the “best” time to begin the process of looking for a buyer, what would you base it on?
I would base it on the moment when your safety & soundness, BSA and IT exams have just successfully completed, and you have 18 months until...
Let’s look at cost savings from a sale/merger.
An acquisition that leaves all the personnel in place along with little to no operational changes still results in cost savings.
It is important to recognize that there are still redundancies like two data processing contracts,...
What drives value, and what detracts from it?
This is not an exhaustive list, but it is the most significant.
First, we'll look at five primary value drivers that influence value.
By far the most important value driver is core earnings.
These are earnings that are consistent,...
We all know how it goes…
If you really want to buy something, you’re going to find a way to buy it.
The same holds true for selling.
If you really want to sell something, you’re going to find a way to sell it.
Valuation slows the process down.
It...
Looking for the best time to sell the bank?
The best advice I know of comes from Aswath Damodaran, professor of Finance at the Stern School of Business at New York University, and his story of the lemmings.
The lemmings became famous, or infamous, when they appeared in a 1958...
