Most banks seeking to acquire another financial institution say they are unlikely to do so in the near future, according to a recent survey by Bank Director Magazine and consulting firm Crowe. The two polled 250 independent directors and senior executives at U.S. banks below $100 billion in assets about their merger and acquisition plans. Of the banks seeking to acquire another institution, only 38% said they expected to do so by the end of 2023, down from 48% last year when asked if they planned an acquisition by the end of 2022.
The survey also asked respondents if their boards and management teams would be open to selling their banks in the next five years. Fifty-two percent said no. In comments, many respondents said their shareholders and communities would be better served if their bank remained an independent entity, while others indicated that their institution is closely held. Of those open to selling their institution, 42% pointed to an inability to provide a competitive return to shareholders as a factor that could drive a sale in the next five years. Thirty-eight percent cited CEO and senior management succession. Listen to an ABA Banking Journal Podcast on the bank M&A outlook for 2023.