The most successful banks have a clear understanding and focus of their market, strengths and opportunities. One big takeaway from the first full day of Bank Director’s Acquire or Be Acquired Conference (#AOBA14 via @bankdirector): it is time for a bank’s CEO and board to reassess their strategic opportunities.
90 Second video recap
Looking for profitability cures
From the strategies and mechanics behind transactions to the many lingering questions regarding industry consolidation, economies of scale, regulatory burdens and how to build long-term value, today featured some pretty fascinating presentations. One of the common themes from the afternoon sessions: most bankers are looking to cure profitability challenges through some kind of M&A activity.
How much are you worth
Whether buying, selling or simply growing organically until it’s time for a transaction, a bank’s leadership team needs metrics in place to know and grow its valuation. As we heard today, valuation is a controversial and complex subject. To wit: it requires an in-depth understanding of a company, its market and competitors, financial and non-financial information. In addition, factors such as the legal and regulatory environment proves quite a challenge.
Overall, the issues I took note of where, in no particular order: margin compression, deposit funding, efficiency improvements and business model expansion in the context of the current environment. Also, keep an eye on the the Northeast and greater Atlanta area this year for increased merger and acquisition activity.
More to come from the Arizona Biltmore tomorrow…