While many expect community bank mergers and acquisitions to resurge in 2021, any impressive percentage growth will be due to the historically low levels seen during the coronavirus pandemic, says Rob Klingler, an Atlanta-based partner at Bryan Cave Leighton Paisner.
Expect the 2021 M&A environment to be shaped on the one hand by long-running pressures to sell — including rate compression, succession challenges, liquidity needs and the rising cost of tech investment — balanced on the other hand by concerns about post-pandemic asset quality, the strengths of banks’ core businesses and valuation mismatches. Klingler notes the “underlying tension” between banks’ reserve levels over the past year and the actual performance of their loan portfolios.
On the latest episode of the ABA Banking Journal Podcast — sponsored by NICE Actimize Xceed — Klinger also discusses the growth of virtual due diligence and the importance of face-to-face meetings in negotiating and finalizing deals.
This episode is sponsored by NICE Actimize Xceed.