When the competitor across the street is acquired by a larger, out-of-town bank, a good many customers defect to the remaining independents for what they perceive will be better service.
But there is another, equally important way in which local banks can benefit from an acquisition: cherry picking employees from the acquired banks.
Several community bankers, especially those in growing organizations, have told me that employees of newly acquired or soon-to-be acquired banks often approach them about jobs.
The independent banks wind up not only with great people but also with effective recruiters - the new employees are often so happy that they encourage friends at their former banks to join them. In fact, one banker told me his company was able to start a new department entirely with people who came over as a team from a bank that is being acquired.
Still, banks looking to hire - and most are these days - cannot always expect potential recruits to come to them. Sometimes they must be aggressive in their recruiting.
For example, Vernon Hill, chief executive officer of $8 billion-asset Commerce Bancorp in Cherry Hill, N.J., said that, when FleetBoston Financial Corp. made a deal to buy Summit Bancorp in Princeton, N.J., Commerce put "help wanted" ads in local newspapers under the headline "Attention Summit Bank Employees."
Then Commerce embarked on a recruiting program that would make a college football coach proud. Recruiters tapped their sources in banking circles to find out which Summit employees were most worth stealing and then the bank went after them.
Indeed, banks need to be selective in whom they recruit. Mr. Hill said his bank only hires people who fit in to its sales culture and are interested in hustling for new business. "If they have a staff mentality, then we don't want them," Mr. Hill said. "But we do make a special effort to get people who we feel have been held back at their former banks."
Of course, Commerce is growing so rapidly - it plans to open at least 30 branches a year for the next several years - that it needs not only experienced people but also ones who can be promoted fairly quickly. This, of course, is a good selling point for recruits.
For community banks that are not growing so quickly, moreover, there are still opportunities to cherry-pick the employee rosters of acquired banks. This is especially true if the bank empowers its employees and its top management continually recognizes and rewards performance.
Mr. Nadler, an American Banker contributing editor, is a professor of finance at Rutgers University Graduate School of Management in Newark, N.J.