BANK BROKERS LLC
A National Mergers and Acquisitions Company for Banks
FREQUENTLY ASKED QUESTIONS
Please read carefully before contacting us.
Because we receive a large number of inquiries on a frequent basis, we like to provide some answers to our most frequently asked questions. These questions may be important to you, as well, to indicate your interest in pursuing discussions:
Most potential sellers will not discuss an opportunity to sell their bank with unknown "outsiders" for fear of that information becoming public and resulting in a loss of customers and employees. Bank Brokers, LLC can best be described as a “finder” of banks for sale and always represents the buyer. We work with our clients to define the type and description of banks that will best meet their needs. That definition includes such factors as the type of charter, location of the bank, size of investment necessary, etc. Proof of Funds is required before we are engaged. Then, we go to work for the client contacting banks that meet that description. Once a bank is located and both the bank and the client have a legitimate interest, we make the introduction. From there, we assist our client in closing the transaction.
We do not represent the bank but, in the process of “mining” for available banks for other clients, we run across banks that are for sale but do not meet the needs of our client. We stay in touch with those banks to ensure their continued interest in selling. If one of those banks meets your needs, we will certainly tell you about it.
There are too many variables to answer this question. As you might expect, many bank owners will not readily discuss their selling interest until they reach a comfort level with us. That may take several contacts. On the other hand, others will readily tell you that their bank is for sale and often have a price in mind.
Like every business, each bank has characteristics that make it unique and that affect the price. Those characteristics often center on market, expertise, present earnings, etc.
Bank Brokers, LLC always represents the buyer. After an initial engagement fee, the buyer pays nothing until a transaction is closed and only then is Bank Brokers paid a broker fee.
In many instances, the bank would be mandated to make disclosures that it was for sale. To protect the value of the bank, its book of business and its customer/employee relations, most bankers would prefer not to make such disclosures until a sales contract is in effect. It is our belief that, in reality, the buyer will pay the fee whether it is built into the price or becomes a matter of negotiation. Regardless, it is in the best interest of both parties to not affect the bank adversely.
Do you supply a list of banks for sale?
We do not typically disclose banks that we may have for sale due to the sensitive nature of the listings. Once a bank owner decides to sell, we market the bank confidentially to our engaged clients based on their needs. Most banks will sell within a reasonably short period of time due to the demand. In addition, we have confidentiality agreements in place and must protect information until we have an executed broker services/confidentiality agreement and have been engaged by potential buyers.
Can you find me an Internet-only bank to acquire?
We do not engage in internet-only banking entities. Our understanding from the most recent conversations with the federal regulators who approve these entities, is that a minimum of $25 million capital is required to file an application to establish or purchase an internet-only bank.
Are mortgage companies prohibited from owning a bank?
Although we cannot speak for the regulators, our experience has shown that mortgage companies, or individuals who are expressly engaged in residential or commercial mortgage operations and desire to use a bank as a platform for mortgages will experience a high level of difficulty in obtaining permission to acquire a bank either state or federally chartered.
What should I have in order to engage your services?
First, you should have a business plan, a 3-4 page summary can be used for preliminary discussions. This will be needed for discussions with the bank regulators. Second, you should have funds available to make an acquisition. Investor acquisitions are cash only, while bank-to-bank acquisitions can be cash and stock. Again, we require Proof of Funds before we can proceed with any discussions. Third, you should have a Board of Directors (minimum of 5). The CEO of the bank should have a minimum of 5 years current experience as a bank CEO, and will be a member of your Board.
How long does it take to complete a bank acquisition?
Approximately 12-18 months or longer depending on the application and business plan presented. This is controlled by the bank regulators.
As you might imagine, we receive a high volume of inquiries on a regular basis. Therefore, we must limit the number of clients we take on based on our work load and the requirements of the prospective client. We would like to discuss your interest further to determine if it can be of mutual benefit. Please let us know by return e-mail a time convenient for us to visit.