Strategic Purchasing:
Assessing Open Bank vs. Failed Bank Buying Opportunities
For leaders of healthy financial institutions, the continuing turmoil in banking represents unprecedented strategic buying opportunities. There are two categories of buying opportunities in the current market: buying from a distressed target pre-receivership, most often by cherry-picking branches, or acquiring the target's entire franchise in an FDIC-assisted acquisition post-receivership.
We have found that growth-oriented, healthy banks see value in comparing and contrasting these two categories of acquisition type as part of a strategic planning exercise with their boards. This article examines the pros and cons of open bank branch acquisitions from a targeted bank compared to acquiring the entire target bank in an FDIC-assisted failed bank acquisition. While the difference may appear obvious on the surface, a deeper look reveals nuances that translate into important risk/return decisions.
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ABOUT SCHIFF HARDIN LLP
Schiff Hardin LLP provides services to banks, savings associations and other types of financial institutions nationwide and internationally. In addition to our traditional strengths in mergers and acquisitions, securities and financings, bank regulatory compliance, and trust department counseling, we have a particular and increasing focus on corporate governance and fiduciary litigation. Our Finance Group also supports our financial institutions clients in all aspects of their credit and lending businesses, and our Securities and Futures Regulation Group assists them in their securities, investment management and commodities-related businesses. We represent some of the largest banking organizations in the U.S. and overseas, and many community banks and thrifts.
For more information, contact us.
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