Magazine article American Banker

On the Bright Side, Acquisitions Usually Result in Rational Pricing

Magazine article American Banker

On the Bright Side, Acquisitions Usually Result in Rational Pricing

Article excerpt

Most community bankers recognize by now that instead of being a threat to their survival, the acquirer who buys the bank across the street often does the remaining independents a big favor.

For in many cases the large bank that buys the community bank loses the local touch that has made community banking so strong.

The shifting or firing of visible local employees who have served the community for years may be necessary in the process of making the acquired bank more efficient. But it is noticed and frowned upon by many customers of the bank.

The added time it often takes to have a loan approved or rejected is also not appreciated, nor are the new forms and approaches taken in the lending process.

Time for Celebration

So some independent banks find that when the bank across the street gets sold or merged, it is a time for celebration rather than mourning and fear.

But there is one further way in which having the bank's competitor acquired often helps the remaining community bank or banks: The acquiring bank is often a much more rational pricing than the bank it acquired may be. …

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