Morgan Posted December 24, 2013 Share Posted December 24, 2013 You can take a look at Wilmington Trust (WL) as the bad bank model. They are being acquired by M&T at large discount to book, based on the amount of bad loans. WT did everything wrong on the banking side. Over 20% of loan book were in construction and development loans, concentrated to a small geographic area, and had large single borrower concentrations. First thing I look at now in the small banks is what years did they grow their loan book, how large is their construction and development book, and do they have retail deposits to match loans. I looked at M&T Bank and they have acquired quite a few banks (22) since 1987 (http://ir.mandtbank.com/acquisitions.cfm) and have gone from $2bn in assets in 1983 to $84bn today. Their stock appreciation hasnt been too shaby either - $1.20 in Jan 1983 to $115 today or about 16.5% annualized. That sounds like a pretty good business to get into. Inspired by the history of M&T I'm wondering if anyone has here been involved in aggresively growing a bank starting from something decently small? Or gone through the merger or acquistion process of a smallish community bank? Other questions: What was your process for investigating banks to buy? What made you reject a bank? Once a bank was purchased, how did put your culture in place? How did you decide which lines of business to expand? Link to comment Share on other sites More sharing options...
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