Independent Banker - July 2021 - 54

" There are lots
of complementary
businesses that
banks can roll
into now, and
technology is
bridging the gap to
make these kinds
of acquisitions
easier. "
-Marty Mosby,
Vining Sparks
$500 million. " Organic growth is fi ne, but there are lots
of opportunities today to acquire established wealth
management fi rms with solid customer bases, " Filgo says.
" The higher your AUM, the easier it is to get an audience
with certain clients like family foundations. "
Off ering wealth management services makes a lot
of sense for Benchmark Bank because of its wealthier
customer base.
The community bank has made other deals in the past.
For example, in 2007, Benchmark Bank also acquired a
correspondent lending group in Monroe, La., which it
eventually sold.
Challenges to consider
Acquiring a nonbank company can present several
challenges for community banks, including dealing with
additional regulatory requirements. Regulators have a
variety of rules limiting what community banks and their
holding companies can own, invest in and control, as well
as what they do with nonbank businesses.
For example, Filgo says Benchmark Bank had to start
regularly reporting to the U.S. Securities and Exchange
Commission after it began off ering wealth management
services. Its state's department of insurance also regulates
its title business.
In addition, these deals can turn community banks
into diff erent kinds of businesses, legally speaking. After
it acquired a fi ntech, Sunfl ower Bank was labeled a
software developer, Nelson says, which subjects it to new
regulatory guidelines.
Mosby stresses that community banks should also
understand how to manage the diff erent kinds of risk
7 tips for
successfully
acquiring
a nonbank
business
If your community bank is
weighing the acquisition
of a fintech, wealth
management firm or
another nonbank entity,
here are a few tips to
keep in mind.
12 3
Determine how the
acquisition fits into your
overall strategic plan. If it
doesn't clearly fit into the
plan, consider whether it's
worth it to proceed.
Figure out how the
acquisition is going to
benefit your bank and
its shareholders. For
example, will the deal
provide the appropriate
return on investment,
expand your existing
customer base or enhance
your business operations?
Determine how you will
manage the acquired
business on an ongoing
basis. Build a plan for
retaining the company's
key employees, who will
be critical to a smooth
transition.

Independent Banker - July 2021

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Table of Contents
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Independent Banker - July 2021 - Cover2
Independent Banker - July 2021 - Table of Contents
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