Community banks: Prepare for an M&A surge

Description

Abstract: The confluence of several factors — including a struggling economy, intense competition and a challenging regulatory environment — is putting pressure on community banks to consider mergers and acquisitions (M&As) as a growth strategy. This article considers a number of issues that small banks will confront as they go through the merger or acquisition process. It discusses the importance of obtaining a professional valuation and performing due diligence, along with whether to structure the transaction as a merger or as an asset or stock acquisition. A sidebar looks at the findings of the FDIC’s Community Banking Study on banking industry consolidation.