Independent Banker - December 2022 - 58

[A chairman] can help guide and
direct the discussions to ensure that,
even if there is disagreement, once
a direction is picked, everyone gets
on board with it. A strong chairman
can make a big diff erence in driving
that forward momentum for the
board itself.
-Anton J. Moch, Winthrop & Weinstine, P.A.
members or with executive offi cers.
" Community banks are heavily
infl uenced by their boards of
directors, " says Greyson Tuck,
president of Gerrish Smith Tuck
Consultants and Attorneys in
Memphis, Tenn. " The board makes
decisions, maintains control and
produces business for the bank. These
are all important responsibilities for a
bank as it goes through the merger or
acquisition process. "
Preserving the value
of the transaction
When one community bank acquires
or merges with another bank,
there are many steps to take and
considerations to discuss. Some of
the most important questions to ask
are: Who are our key players? What
are their relationships to the bank?
How can we best preserve the value of
those relationships?
" Ultimately, that's where the value
lies in the acquisition process, " says
Tuck. " It's about the extent to which
you can preserve the relationships.
This, in turn, preserves the value
of the transaction. "
Post-merger board succession
doesn't always mean picking a handful
of current directors and creating a
single combined board either. For
example, Tuck recently worked on
a deal where the holding companies
for two diff erent rural community
banks were interested in merging
the two entities into one. The talks
took place between the two holding
companies and initially focused on
the future direction of the combined
bank, including the succession plans
for the current offi cers and directors.
Discussions centered around culture
and fi t as the banks worked to keep as
many active board members onboard
as possible.
Then, the banks decided to set
up two boards: one focused on
technology, operations and day-today
contact with the community,
and the other centered on business
planning and strategy. While there
was some overlap across the two
boards, the bank worked to identify
individuals who would be best suited
to each specifi c group. Tuck says
this " brought a new focus for those
two organizations as they put the
boards together.
" Ultimately, it ended up working
out pretty well for them thanks to
those very early discussions that took
place before deal pricing and future
plans were even discussed, " he says,
advising a similar, proactive approach
to board succession planning for any
community bank that's merging with
another institution.
" Right from the start, there was
a clear focus on the expertise and
skills of the existing directors at each
organization. Then, a lot of thought
went into which individuals would be
the best fi t for each board. "
What to do when family
is involved
On the surface, an M&A deal
involving a family-owned community
bank looks just like any other deal.
Those similarities usually end when
the layers are peeled back on the
family-owned entity, whose corporate
culture isn't always refl ected in the
books, so to speak. For this and
other reasons, post-merger board
succession planning for this type of
bank requires a special touch. Success
will depend on whether the new guard
can respect the synergies between the
banks' cultures, the founding family
52 Q ICBA Independent Banker Q December 2022
Independent Banker - December 2022

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