Survey respondents also reveal mixed views on the economy, with 31 percent predicting an economic downturn or recession in the U.S. by the end of 2017. One-third are unsure.
Bank Director surveyed online 206 chief executive officers, chief financial officers, chairmen and directors of U.S. banks in August and September. Fifty-eight percent of survey respondents who have made a past acquisition reveal that attractive markets are the most important attribute of a potential acquisition target. Lending teams are also highly prized: Forty-one percent of respondents say that the opportunity to acquire lending talent is highly important, which can be attributed to a competitive environment for commercial lenders.
Other key findings include:
- Just one-quarter of respondents say their bank is likely or very likely to purchase a branch or multiple branches by the end of 2017. When asked about the attractiveness of branch acquisitions compared to five years ago, attitudes are mixed: One-third believe that buying a branch is more attractive than five years ago. Twenty-eight percent believe that branch acquisitions are less attractive.
- Twenty-five percent report that they're open to selling their institution, considering a sale or actively seeking an acquirer. Of these potential sellers, 54 percent cite regulatory costs as the reason they would sell the bank, followed by shareholder demand for liquidity (48 percent) and limited growth opportunities (39 percent).
- Price, at 38 percent, followed by cultural compatibility, at 26 percent, remain the two greatest challenges faced by boards as they consider potential acquisitions. Price is also identified as the top reason that potential buyers and sellers have walked away from a deal in the past three years.
- Forty-five percent report that they are seeing deterioration in loan underwriting standards within the industry, leading to possible credit quality issues in the future. Concerns about the quality of loan underwriting standards at the target institution caused 28 percent to walk away from a potential acquisition.
- Eighty-eight percent believe that interest rates will rise by the end of 2017. Most respondents, at 46 percent, expect a modest increase of less than half a percent.
Full survey results are available online at BankDirector.com, and will be featured in the 1st quarter 2017 issue of Bank Director magazine.
ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its print and digital editions of Bank Director magazine, executive-level research, annual conferences and its website, BankDirector.com, Bank Director reaches the leaders of the institutions that comprise America's banking industry. Bank Director is headquartered in Brentwood, Tennessee.
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