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Archive for February, 2015

Signs Your Bank May Sell

This week’s blog will commence after this important announcement:

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Congratulations to Ray Lafond for winning the Super Bowl contest!!
https://heresthedealaj.com/2014/09/04/even-bankers-love-football/

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We are very excited to send Ray and a guest tickets to see a regular season game and follow up with him on the blog about his experience! We will be doing this contest again next year, so be ready.

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Back to our scheduled topic:

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Mergers and acquisitions are on everybody’s mind, especially right now. There are obvious signs and not-so-obvious signs that your bank or another bank is trying to sell.

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1. Major changes within the bank. Examples include major layoffs, an abrupt stop to hiring new people, especially if it occurs during the hiring process with no reasonable explanation, and a reduction in middle management. We saw these things occur before the announcement that BB&T and Susquehanna would merge and we’ve seen this time and time again in other situations.

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2. A bank makes a big geographic move or two that does not make immediate sense. Maybe they jump over a few counties from the market they are established in, or they buy branches of a bank that doesn’t seem like a good match. Maybe they come into an area that everyone is trying to get out of instead of into. Many times, not always, the banks seemingly illogical move, is indeed very logical. Some times they are trying to be more attractive to a buyer or trying to color in their own map, but the grand scheme is not yet seen. By moving into a particular area, banks trying to sell are trying to gain leverage by being closer to banks wanting to buy.

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3. If the bank hires chief level people who have been through several mergers and/or acquisitions, this may be a red flag. If your new CEO sold his or her last 3 banks, don’t be surprised if your bank is next.

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4. You see high level people from other banks “hanging out” at your bank. Believe us, they’re not there for the coffee. This is especially true if these people are with banks known to be making purchases right now. DUH

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5. Another duh one: Banks who have tried to sell before unsuccessfully will typically do so again… Most of the time, the intent is still there. The bank is not likely going to put itself out there as being for sale, have a deal fall through, and then decide not to sell.

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These are just some of the red flags to look for. If you have any you’d like to share leave us a comment or shoot us an email. You can even ask a question in our new section “Ask Us Anything.”

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