Welcome to the Q2 2023 edition of the Bank M&A Quarterly eNewsletter from Bank Merger Marketing. We continue to monitor potential triggers for new M&A activity in the banking space, but we realize many other pressing issues have preoccupied institutions over the past few months. But just as some in the industry were caught in a less-than-prepared state last year before the unprecedented rate increases, we will eventually see a more favorable environment for consolidation. Those leaders that are thinking both in terms of near-term balance sheet challenges (higher for longer scenarios and NIM compression) AND long-term competitive growth opportunities (M&A and tech-enabled) will benefit the most…DOJ’s latest comments notwithstanding on M&A.
It is always interesting that when disruptions occur, there are inevitably more strategic and competitive areas to address in the following periods. Management teams certainly have added skills and new tools to their kits from this round.
For me, the two areas that I feel leaders of institutions need to add in potential merger partner due diligence are liquidity risk through digital money movement and machine learning/AI strengths and weaknesses. A baseline to knowing what you are buying. Both should increase multipliers on any combination in the future.
On the money movement side, there is not much an institution can do to alter its fate. Still, potential combinations should consider how their customer profile behaves and adapts over time along with a point-of-view for potential impacts from a move to FedNow beginning in July.
We all realize now that machine learning and artificial intelligence will continue to significantly impact all industries (albeit to what degree is for debate). In conversations over the past few months though, we have found there is a wide reality gap between institutions in education levels and scenario planning for their institutional impact. With the increase of fintech strategic partnerships and their varying strategies to incorporate new tools, this topic cannot be tabled until closing to wait and see how it plays out.
This issue’s readings offer some wide perspectives on planning and M&A successes in other industries. It is always helpful to remember that we can all learn quite a bit from sources that don’t always seem to have an obvious correlation to what we hope to understand.
Here's to succeeding with new challenges and continuing to redefine and reinforce industry purpose and its benefits to our clients and communities.
What do people and processes have to do with delivering a successful M&A program? Just about everything, because the payback of your investment categories is truly tested in M&A. After all, aren't mergers really about successfully aligning people and processes between two organizations to create a better single entity?
Did you miss the webinar hosted by Digital Onboarding? Listen now to learn about 1) The typical communication mistakes that institutions make during M&A events; 2) What’s most important to customers and members during the transition; 3) How to build a communications strategy that maximizes satisfaction and minimizes attrition rates.
As with any newsletter, we welcome your feedback and thoughts to help us make this resource more impactful. Even if you want to share your own insights or just talk Bank M&A. We know everyone is inundated with inbox fodder from past interests that no longer are of value, so we want this to be different, for both institutions and facilitators of transactions. If once you have scanned the contents, you still want to unsubscribe, just click the 'manage preferences' link below.
