ABA Banking Journal - August 2007 - (Page 38)

CORRESPONDENT BANKING com, Wichita, Kan. Mergers in the future? Unlike, say, the Federal Home Loan Banks or the Federal Reserve District Banks, the number and relationship of bankers’ banks isn’t set by statute. Thus, the number and form of the competitors may change through consolidation. “That’s a real possibility,” says Pacific Coast’s Tom Evans. He suggests that it could make sense for some of the smaller bankers’ banks to partner up in some fashion, beyond the joint operation strategy already used by some. Evans suggests that a single deal might be the catalyst for change. “If two bankers’ banks got together,” he says, “the other smaller bankers’ banks might decide that it’s time for them to do the same.” How they structured such a deal—amalgamating operations into one bank, or retaining separate charters while uniting under one holding company, would depend on a number of factors. It’s significant, says Ron Slater of Bankers’ Bank USA, Wisconsin, that “we’re starting to see the discussion of mergers and acquisitions among bankers’ banks in public.” On the other hand, Oklahoman Don Abernathy doesn’t see M&A as a future wave. “We all do things differently,” he says of the bankers’ bank set. “We all have our own strengths and our own weaknesses.” While he can see the value of partnerships such as the securities operation mentioned earlier, he doesn’t believe his board would find value in a merger with another bankers’ bank. Those bankers’ bankers who think that their boards might go for some M&A tend to think it would take the form of multiple banks under a holding company, rather than an outright merger, with, possibly, a shared backshop. Such organizations already exist—take the IllinoisNebraska combination mentioned earlier. And then there is First National Banker’s Bankshares, Inc., which owns three sepa- rate bankers’ bank charters: First National Banker’s Bank, Louisiana, $255.7 million-assets; Mississippi National Banker’s Bank, $128.1 millionassets; and Alabama Banker’s Bank, N.A., $271.3 million-assets. The latter was founded in 2004. Yet some of the younger, smaller bankers’ banks have plenty of opportunity left in their own markets. Bankers’ Bank Northeast, for instance, is doing business with one-third of the community banks in its markets, according to CEO Peter Sposito, who says his organization’s priority for growth for the near term is selling to more of the remaining two-thirds. “We’ve got plenty of work to do here,” says Sposito. BJ Looking for a bankers’ bank? Consult our directory, beginning on page 40 of this edition 38 AUGUST 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html http://lendingtools.com http://www.bankers-bank.com/FNBB/index.html http://www.bankers-bank.com/FNBB/index.html http://www.bankers-bank.com/MNBB/index.html http://www.bankers-bank.com/MNBB/index.html http://www.bankers-bank.com/ABB/index.html http://www.aba.com http://www.aba.com http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - August 2007

Contents Editor's Column The Unbankers Snapshot: Do Share Repurchases Signal More M&A Activity Sleight of Mind Goals Behind Proposed ABA/ACB Merger ABA Resources ABA Chairman's Position Should You Sell Those Nonperformers Pass the Aspirin Branch Design - Evoking a Sense of Place Two Banks Take the LEED Move Over, Buddy Service Feature: Bankers' Banks Directory Websites: What's State of the Art for Banks? Citi Mobile to Go Strong with iPhone? Date First, Marry Later Mailbox Banker's Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - August 2007

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