ABA Banking Journal - November/December 2017 - 29

Four Ways Boards Can Prepare Themselves
to Entertain Opportunities
Understand your own strategy, market, worth. What is it
about your bank that is attractive to a potential buyer or target?
"Understand your weaknesses, too," says Reed Smith's Paul Jaskot.
"And make sure you're in a position with regulators to do a deal."

1
Don't slam the door on investment
bankers. "You could resist having those
conversations because you think, oh, we're
not going to sell. But at some point it will
come up and it's better to talk to people you
are comfortable with," Jaskot says.

2

Understand your risk tolerance. "If
you have a franchise that has done well in
terms of loan losses and investments, there
are some targets out there that are just not a
good fit," he adds.

3

Have a stable of advisers ready to help you, including
lawyers, accountants, investment advisors, and of course investment
bankers. "For many banks, the one M&A transaction they are going
to do is the one where they are going to sell to someone else," he
explains. "They need advisors with whom they have established a
relationship and who have gotten to know the bank."

4

Even the most independent-minded bank needs a framework
its board can use to evaluate potential transactions.
But there is a world of difference between developing an
M&A strategy and executing it when an offer materializes.
"It's a really profound and huge responsibility for the board
to say, 'The letter is here. This is real.' They cannot take it
lightly," says Kat Sanchez, a director of compliance risk at
Grant Thornton in Washington.
The board should crack open the bank's strategic plan as a
guide to evaluate offers, adds ABA SVP Helen Sullivan. Key
considerations include the benefits to the bank, the impact
on shareholders, the financial implications and cultural fit.
It is wise for boards to view M&A through the prism of
compliance risk broadly, considering other areas of risk
management, such as consumer, operational and thirdparty risk specifically, Sanchez says. Banks that would break
through the $10 billion asset mark as the result of M&A will

face intensified regulatory scrutiny and expectation,
including the oversight of the Consumer Financial Protection
Bureau, she notes. "A problem with a bank's consumer
or vendor management risk profile can be a gamechanger, and one high-risk consumer complaint, such
as a potential UDAAP allegation, can be a show-stopper,"
Sanchez said. 
The board that strives to keep the dialogue open and
recognizes that talking about M&A isn't the same as
endorsing it can be well positioned to navigate opportunities
successfully. "Having a regular dialogue is a way to ensure
that when an opportunity does come in, you don't have to
scramble to learn and then evaluate. You can simply apply
your criteria," Childs says.
DEBRA COPE is editor-in-chief of the ABA Banking Journal
Director's Briefing.
aba.com/BankingJournal | ABA BANKING JOURNAL

29


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Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2017

Chairman’s View
Upfront
Legal Briefs
Economic Outlook
Power Up Profile
Pitching In
Choices and Options Down on the Farm
Eager or Not, Every Board Needs an M&A Strategy
Adapting to Survive
More Than Just a Drink
Operations
Payments
Small Business Lending
Human Resources
ABA Compliance Center Inbox
From the States
Corporate Social Responsibility
Index of Advertisers
From the Vault
ABA Banking Journal - November/December 2017 - Intro
ABA Banking Journal - November/December 2017 - ebelly1
ABA Banking Journal - November/December 2017 - ebelly2
ABA Banking Journal - November/December 2017 - cover1
ABA Banking Journal - November/December 2017 - cover2
ABA Banking Journal - November/December 2017 - 3
ABA Banking Journal - November/December 2017 - 4
ABA Banking Journal - November/December 2017 - 5
ABA Banking Journal - November/December 2017 - 6
ABA Banking Journal - November/December 2017 - 7
ABA Banking Journal - November/December 2017 - Chairman’s View
ABA Banking Journal - November/December 2017 - 9
ABA Banking Journal - November/December 2017 - Upfront
ABA Banking Journal - November/December 2017 - 11
ABA Banking Journal - November/December 2017 - 12
ABA Banking Journal - November/December 2017 - 13
ABA Banking Journal - November/December 2017 - 14
ABA Banking Journal - November/December 2017 - 15
ABA Banking Journal - November/December 2017 - Legal Briefs
ABA Banking Journal - November/December 2017 - 17
ABA Banking Journal - November/December 2017 - Economic Outlook
ABA Banking Journal - November/December 2017 - Power Up Profile
ABA Banking Journal - November/December 2017 - Pitching In
ABA Banking Journal - November/December 2017 - 21
ABA Banking Journal - November/December 2017 - 22
ABA Banking Journal - November/December 2017 - 23
ABA Banking Journal - November/December 2017 - 24
ABA Banking Journal - November/December 2017 - 25
ABA Banking Journal - November/December 2017 - Choices and Options Down on the Farm
ABA Banking Journal - November/December 2017 - 27
ABA Banking Journal - November/December 2017 - Eager or Not, Every Board Needs an M&A Strategy
ABA Banking Journal - November/December 2017 - 29
ABA Banking Journal - November/December 2017 - Adapting to Survive
ABA Banking Journal - November/December 2017 - 31
ABA Banking Journal - November/December 2017 - 32
ABA Banking Journal - November/December 2017 - 33
ABA Banking Journal - November/December 2017 - More Than Just a Drink
ABA Banking Journal - November/December 2017 - 35
ABA Banking Journal - November/December 2017 - Operations
ABA Banking Journal - November/December 2017 - 37
ABA Banking Journal - November/December 2017 - Payments
ABA Banking Journal - November/December 2017 - 39
ABA Banking Journal - November/December 2017 - Small Business Lending
ABA Banking Journal - November/December 2017 - 41
ABA Banking Journal - November/December 2017 - Human Resources
ABA Banking Journal - November/December 2017 - 43
ABA Banking Journal - November/December 2017 - 44
ABA Banking Journal - November/December 2017 - ABA Compliance Center Inbox
ABA Banking Journal - November/December 2017 - From the States
ABA Banking Journal - November/December 2017 - 47
ABA Banking Journal - November/December 2017 - Corporate Social Responsibility
ABA Banking Journal - November/December 2017 - Index of Advertisers
ABA Banking Journal - November/December 2017 - From the Vault
ABA Banking Journal - November/December 2017 - cover3
ABA Banking Journal - November/December 2017 - cover4
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