Missouri Mergers And Acquisitions

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After a rather slow start in 2014, the mergers and acquisitions (M&A) activity picked up considerably during the second half of the year. We look for a busy 2015 as the “chatter” throughout the industry continues. Many discussions are starting, but making it to the finish line remains a challenge. Each deal seems to face its own set of issues, whether it is the disconnect between buyer and seller of the true fair-market value of the target bank or regulatory issues, which cause the application to be kicked to Washington (where it remains in the “black hole” of red tape and continuous delay).

Most experts have predicted a wave of M&A activity for the last three or four years, as the banking industry continues a move to consolidation. Maybe 2015 will see a deluge of activity based on pent-up demand. Among the factors that could fuel such an increase are increased compliance costs spread over a larger asset base; transaction risk reduced as asset quality improves; prices of M&A deals edging up; many management teams aging and rural banks facing diffi culty in finding successors; and “banker fatigue” occurring in both management groups and boards, as they tire of working harder and facing unrelenting regulatory pressures but receive lower profits and rewards. All this on top of a difficult environment for smaller institutions to raise the capital needed to meet increasing regulatory requirements.

Originally published by BankNews, Inc. in The Show-Me Banker.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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