The following article can be found on the blog page of the FMS website.


Squeezing the Little Guys?
By Mark Loehrke, Editor, Financial Managers Society

While most M&A experts are forecasting a continuation of the steady but unremarkable pace of the past several years for banks and credit unions in 2018, one group of institutions may find the predictions a little more ominous than most.

Given the driving forces behind most of the deals in the community banking space these days – including competitive pressures, technology demands and succession planning issues – some observers believe those institutions with less than $200 million in assets stand as the most likely to be absorbed or merged away. As it stands, the number of banks in this range has already been more than cut in half over the past dozen years.

This is a trend that was reflected as well in the 2017 FMS industry research study Community Mindset: Bank and Credit Union Leadership Viewpoints, wherein the smallest institutions in the survey – those in the $200 million to $499 million asset range – were the most likely to see the possibility of a merger or acquisition as “very important.” One possible explanation for their interest – in the FMS survey, this group included institutions that were also the least likely to have a solid succession plan in place. In other words, for some small institutions, in many cases a deal to merge or be acquired is the most readily available succession plan to be had.