In the face of this month’s political transitions, bank executives and their boards face some major issues without clear answers. For instance, many continue to speculate on the Fed’s interest rate hikes while others pontificate on potential regulatory changes (hello CFPB). While convenient to cite November’s election results, keep in mind that we, as an industry, were already in a period of significant transformation. Still, it’s a titanic-sized understatement to say Republican presidential nominee Donald Trump’s surprise victory shook up the world.
While change remains a constant in life, I am personally and professionally excited to return to the Arizona desert later this month for a great tradition: Bank Director’s annual Acquire or Be Acquired Conference. With a record turnout joining us at “AOBA,” I’ve begun to assess various business models of institutions I know will be represented. For instance, those categorized by:
- Organic Growth vs. Acquisitive Growth;
- Branch Light Model vs. Traditional Models; and
- CRE Focused Lenders vs. C&I Focused Lenders.
I am finding there are multiple dimensions to such business structures — and I anticipate conversations later this month will help me to better understand how the market values such companies.
As AOBA helps participants to explore their financial growth options, I am keen to hear perspectives on the “right size” of a bank today — especially if certain asset-based constraints (think $10B, $50B) are removed. Given a number of recent conversations, I expect increased IPOs and M&A activity in the banking space and look forward to hearing the opinions of others.
Finally, with the advance of digital services, I’m curious how technology trends might impact bank M&A, and more broadly, banking as a whole given the impact on branch networks. Indeed, as branches become less important, they become less valuable… which impacts deal valuations and pricing going forward.
Between now and the start of the conference, I intend to share a whole lot more about Bank Director’s 23rd annual Acquire or Be Acquired Conference on this site, on LinkedIn and via Twitter. If you’re curious to keep track, I invite you to subscribe to this blog, and follow me on twitter where I’m @aldominick and using #AOBA17.