Following the welcome of Pope Francis last week, I’m tempted to call this a slower news cycle and shorten today’s column from three points to two. But as the sun sets on this week, who am I to short-change the spirit of this #FridayFollow-inspired post? Especially as I heard/read/saw some pretty darn interesting things since last checking in!
- With Tuesday’s WSJ news that John Koelmel was suddenly out as CEO of First Niagara Financial Group (NASDAQ: FNFG) in Buffalo, N.Y, kudos to the American Banker for its subsequent article introducing some high-profile names as potential successors. With good friend Cathy Nash’s name surfacing, let me simply wish her well if she winds up in that position. Regardless of who takes the reins, the 43rd largest bank (in terms of assets) promises some interesting stories, and retrospectives, in the coming weeks and months.
- Last week, I admitted to a bit of M&A “fatigue.” Not so seven days later. With the Koelmel announcement fresh in my head (it should be noted that he led the bank through a period of rapid growth beginning in ’05), I started to think about how history will judge their acquisition of HSBC’s entire upstate New York branch network. At the time, some thought it would spark what is now a cliché: a “wave of bank consolidation.” So why think back when the purpose of this column is meant to be fresh? From what I’ve heard (and read), branch acquisitions can present an attractive alternative to traditional M&A. Case-in-point, a research report put out by Raymond James called Bank M&A: Activity Should Gain Steam in 2013. While a few months old, their messages remain clear: with the “mega and super regional banks focused on expense control, many are taking a fresh look at reducing their branch networks. In turn, well positioned regional and community banks can look to branch acquisitions, which provide a low risk and cost-effective way to enter a new market or bolster an existing market.” Not necessarily a new idea, but just as I gave props to Fred Cannon from KBW last week for perspectives like these, let me give a shout out to Anthony Polini and his equity research colleagues for consistently delivering valuable insight and information like this on a regular basis.
- Turning from M&A to truly organic growth, I was really impressed with a piece Tom Bennett, the Chairman of the three-year old First Oklahoma Bank in Tulsa, Oklahoma, authored for BankDirector.com. Tom’s piece, The Hidden Capital of Social Networks, introduces the idea of addressing “your equity capital needs and other performance items in your bank… (vis-a-vis) the social capital that exists in your investor group and how it can be utilized as a valuable source of strength.” With so many CEOs and Chairmen of community banks hoping and wanting their outside directors to generate business for the bank, this piece is definitely worth a read.
Finally, a special thanks to @GilaMonster for providing her input on today’s post… I am very grateful.
Aloha Friday to all!
About That Ratio 