Bank Director held the Acquire or Be Acquired Conference (AOBA) in Arizona last week. It was the most attended year in the conference’s history with over 1,100 bankers and vendors, which might give you an indication of the level of interest merger and acquisition activity is currently attracting within the community banking industry.
Some of the key discussion points from presenters indicated there is likely to be robust M&A activity in the next 18 to 24 months.
Banks are weighing the costs and rewards associated with acquiring new Fintech startups, forming strategic partnerships with established ones, or building their own applications to layer on top of an existing business model. The strategic choice that banks make may matter less than the absence of taking any action, which can hamper competitiveness and ultimately affect their valuations.
There was general consensus that there would not be any relief in the areas of Bank Secrecy Act (BSA) or Anti-Money Laundering (AML) in the near future. Banks with issues in these areas may have significant hurdles to overcome as both potential buyers and sellers.
Richard Davis, CEO of US Bancorp, in his keynote message said that the banking industry is entering a period of “significant consequence”. This will be a time of great movement within the banking industry. Banks should position themselves to take advantage of the change and adapt. Merger and acquisition strategy will directly impact your ability to be profitable, sustainable and innovative.
For more information on this topic, or to learn how Baker Tilly banking specialists can help, contact our team.