FAQ: What Regulatory Issues Does My Bank Face?
Financial institutions are highly regulated entities. Compliance issues include asset quality, capital adequacy, community reinvestment, as well as many others.
If regulators determine an institution’s non-compliance, they will require management to take corrective actions and often enter into a formal agreement that includes a detailed plan. Cerfis can assist you in formulating and executing a compliance plan.
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The Cerfis Group logo is a servicemark of Cerfis Group, Inc. Bank Mergers & Acquisitions — The Best Bank For Your Money
Banks are acquired usually for one of two reasons: because people want to invest, or banks want to expand.
Whatever your reasons for considering the purchase of an existing bank, here are some beginning variables to consider: bank management (current and future), operational synergies between an existing bank and its new ownership, and meeting the standards of organizing a bank if you are an individual investor.
First, the fact that a bank is operating has management in place with an existing infrastructure generally makes acquisition an attractive option to opening a denovo bank, which may take up to three years to become profitable and starts with nothing in place.
With regard to operations, when banks acquire other banks, operational synergies usually occur that enhance the bottom line of the resulting institution. Additionally, the acquiring institution enjoys market growth that aids it in cross-selling and developing services.
When individuals acquire an existing bank, they must file a change of control with the appropriate regulatory agency. Acquirers must meet the same general standards as denovo organizers.
Before you invest, know why you're investing and what you're looking for in a bank or financial institution. Cerfis can help you both ready yourself before an acquisition, and help you to find and know the right bank as it emerges. Talk with us.
>> How can we help you find the right bank for acquisition? Contact us to learn more.
Bank Holding Companies: Putting It All Together Under One Roof
Depending on your situation, your needs and purpose for starting or acquiring a bank, a bank holding company may be the route for you to take.
Banks may be owned either by individuals or by bank holding companies. Bank holding companies are chartered and regulated by the Federal Reserve System (“Fed”) and, with restrictions, can accomplish many of the tasks that a bank can.
A bank holding company may own one bank or several banks and may also own affiliate operations in areas such as mortgage, trust, etc. It differs from other corporations in that it is limited in the activities in which it may engage.
Know the risks, regulations and rewards of chartering a bank holding company before you get too far down the road. Cerfis can help you along the way, giving you the right information, knowledge and confidence you need to put you on a path to success.
>> Let Cerfis assist you in formulating a bank holding company. Contact us today.
From Scratch: Starting A De Novo Bank
Considering a De Novo? De Novo or new banks can be sound investments. De Novos are often organized to provide or expand financial services offered to a particular market.
Whatever your reasons for organizing a De Novo bank, make sure you consider those entities that must approve your De Novo charter, both nationally and within the state of your new bank's charter—the Office of the Comptroller of the Currency (OCC) for national banks, your state banking authority for state banks and the Federal Deposit Insurance Corporation (FDIC) for deposit insurance of all banks.
In addition, all of the aforementioned agencies have specific criteria that must be met with regard to the organizing group (usually the initial directors of the institution) and the management. Beyond community need, perhaps key to those criteria are the need for adequate capital to underwrite initial operations and growth along with and management expertise.
Of course, this is just the beginning. Cerfis can help you with the rest. With our years of combined experience in running and managing banks and financial institutions, having Cerfis on your side will help you to navigate the waters of chartering a De Novo bank.
