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After an active 2015, with nearly 290 deals announced, don't think for a second that bankers are taking a breather. Executives are looking at ways to build scale, improve their fintech offerings and ensure smooth transitions following acquisitions. Here is a sampling of recent comments about bank consolidation.
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Rise of Challenger Banks

Several factors are prompting small banks to merge and bigger banks to downsize. Tom Michaud, CEO of Keefe Bruyette & Woods, told attendees of last week's Acquire or Be Acquired conference in Phoenix that he expects those factors to supercharge growth at 25 high-performing institutions with $5 billion to $50 billion in assets. These "challenger banks" include Bank of the Ozarks, Signature Bank and SVB Financial.
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Pairing Banks and Fintech

More than three-fourths of bankers polled at the Bank Director conference expressed an interest in buying technology companies, while KBW's Michaud noted that investment in fintech firms is skyrocketing. Paul Schaus, CEO of CCG Catalyst Consulting Group, called fintech and banking "a natural marriage."
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Paid to Stay

Tom Broughton, CEO of ServisFirst Bancshares, recently discussed his company's strategy of "lifting out" banking teams at the conference. He said bankers who receive "stay put" bonuses after a merger are the hardest to recruit. Broughton also touted the importance of getting incentive packages right. "People will do what you incent them to do," he said. Others "will do exactly what you incent them to do, so you have to be careful."
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Head Games

Walter Moeling, senior counsel at Bryan Cave in Atlanta, said during a presentation last week that he frequently advises merging financial institutions to consult with corporate psychologists to help smooth over cultural issues.
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Bigger Is Better

The consensus among bankers is that scale matters. "We seem to be in a trend that bigger is better" across all sectors, said Steven Hovde, CEO of Hovde Group in Chicago, adding that, if present trends continue, there will be no banks with less than $100 million of assets. "If you don't [get bigger], you're simply not going to be here." Hovde said.
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Deposits Are Valuable

Banks with low-cost deposits are alluring again. "We'd like to enhance our deposit base," Kevin Lynch, CEO of Oritani Financial, said during a recent presentation, though he did not specifically discuss his interest in an acquisition. "We consider it one of our weaknesses. We'd love to be a deposit-rich franchise."
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Suffocation by Regulation

A banking conference is incomplete without someone complaining about regulation. Michael Shepherd, BancWest's CEO, said he is concerned that compliance burdens will smother ingenuity. "There's a chance we'll be too safe and sound at some point," he said. "A heavy and severe [regulatory] environment suppresses innovation and creates opportunities for disruptors."
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Backlash for Fee Income

A pair of speakers at a recent conference suggested that acquirers are becoming skeptical of banks that derive a high percentage of revenue from fees. Sal Inserra, a partner at Crowe Horwath, characterized fee income as "noise earnings," and Mark Kanaly, who chairs the financial products and services group at Alston & Bird, said banks will not pay top dollar for fee-driven business models because "they're volatile businesses."
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