Independent Banker - August 2018 - 97

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Field Notes
Dispatches from community bankers
How to own your
merger process
I
have had the privilege to be part of a merger
process from diff erent vantage points: on the sell
side, as legal adviser, and then as community bank
chairman and CEO. I can safely say that a merger
process is anything but linear. You can expect each
stage-pre-discussions, negotiations, post-signing
and pre-closing-to be accompanied by myriad
issues and shifting emotions. What follows are a
few insights into how to " own " your process by
anticipating issues and emotions. Said simply, a
successful transaction requires comprehension,
coordination and communication at each stage.
Comprehension refers to knowledge about
what happens when the board contemplates,
decides to explore and votes to embark on partnering
with another fi nancial institution. To gain
that knowledge, ask yourselves what a successful
transaction would look like and identify issues of
importance. Learn about what type of partner a
potential institution likely will be at each stage.
What points are likely to be critical to the other
side? Transactions involve give and take, and
lines in the sand cannot be drawn at every turn.
Practically speaking, the process can reach a
point of no return, emotionally, operationally and
legally. Comprehend the unvarnished realities associated
with each stage of the process and the
impact that a transaction, beginning with the announcement,
will have on your board, employees
and communities.
Coordination means ensuring that every party
to the process is doing what they are supposed to
be doing. Own your process by knowing what role
each key adviser will, or will not, play along the
way. Manage the expectations of your board, and
understand that certain crunch times will tax your
internal resources. As an old-school guy, I made a
lot of lists (on paper) of things on my mind and on
the minds of others within the organization.
Keep talking
PAUL M.
AGUGGIA was
chairman and
CEO of Clifton
Savings Bank
until its merger
with Kearny
Financial Corp.
in May 2018.
He now serves
as a director of
Kearny Bank in
Fairfield, N.J.
Communication is essential, yet breakdowns are
common and can lead to frustration, infi ghting,
bitterness and an erosion of the critical trust that
must exist between all parties. Communicate with
advisers, directors and key executives-in real
time-about how the issues you initially identifi
ed as critical, or uncovered in due diligence, are
being addressed. Anticipate employees' questions
and prepare your responses. Have regularly
scheduled meetings. Trust me: A lot will be brewing
inside your bank.
The merger process can be daunting, especially
for leadership that has not experienced the
weighty, often nuanced issues that arise at each
stage. Your legal and investment banking professionals
will help check many boxes with their
wisdom and experience. But again, the process is
yours to own. It is business, of course, but for the
CEO, board and employees of a community bank,
it is also very personal.
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Independent Banker - August 2018

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