M&A Integration Planning for Banks


Business partners shaking hand and M&A integration planning on the foregroundMergers and acquisitions (M&A) are high stakes, fast-paced events that must be handled with skill and strong leadership. Bank leaders are tasked with selecting a team to carry out a clear and structured timeline for M&A integration success. An M&A integration plan for banks typically consists of seven steps to help ensure that the lifecycle of the deal runs smoothly and with minimal disruption to the business. M&A integration plans should precisely outline how and when major resources, processes and assets of the acquiring company will be combined to reach goals.

Define the Structures of Departments

The first step in M&A integration planning for banks involves defining the structures of departments. Skilled and highly-motivated employees from both companies should be chosen to form a strong integration team, and integration activities should be divided into functional categories, such as sales, service, manufacturing, human resources, finance, legal and information technology. Specialists in each department should be tasked with performing integration tasks within their area of expertise. This will help ensure that the integration runs quickly and seamlessly.

Determine the Department End States

Integrations ultimately come to end. Determining the department end states during the planning phase is an important component in managing the rest of the integration. The end state refers to the point in the integration when most of the planned integration activities have been completed, IMO processes can be ramped down, and any remaining open integration issues are transitioned to a normal operation’s function. In information technology, an example of an end state is when all employees are using common email, ERP and telephone systems.

Create Expectations for Tasks and Projects

Business meeting in progress. When it comes to M&A integration planning, everyone has a role to fulfillWhen it comes to M&A integration planning, everyone has a role to fulfill. It is important to outline each team member’s responsibilities and clarify all expectations from the start of the process. A lack of future planning can cause an integration team to fail, but identifying team members’ future roles in advance eliminates any potential confusion., In addition to identifying tasks and establishing accountability for those tasks, it’s critical to set specific timelines for accomplishing goals.

Establish Internal and External Communications Plan

Structured communications are crucial to determine what steps come next in a merger or acquisition. Good communication also creates a strong foundation for the combined company’s future success. Communication plans should inform and influence stakeholders, such as vendors, regulators, customers and employees, prior to the transaction’s closing. A communications plan can also help minimize the anxiety of employees and boost worker morale. Both internal and external communication plans must be developed to prevent misinformation or costly mistakes.

Develop a Plan for Retaining and Recruiting Top Talent

During a merger or acquisition, business leaders must make major decisions regarding who stays and who goes. Businesses must also focus on retaining their top talent and recruiting new professionals who will provide value to their growing organization. It is common for employees to have some uncertainty when the deal becomes public knowledge, sometimes causing workers to leave the company before the transaction has concluded. Developing a plan for talent retention and recruitment can help reduce employee turnover and ensure that the company recruits and retains talented staff.

Identify Early Growth Opportunities

Mergers and acquisitions can create immediate opportunities for banks and contribute to a solid foundation for success. Identifying early growth opportunities can help businesses achieve faster growth and encounter fewer disruptions to business operations. Opportunities may involve combining or streamlining operations or corporate functions to improve service deliveries or reduce costs. These opportunities may also lead to increased earnings that may provide an organization with growth capital for new investments.

Receive Sign-Off from the CIO Before Execution

Acronym CIO as Chief information officer. A CIO plays a vital role in merger and acquisition planningA chief information officer (CIO) plays a vital role in merger and acquisition planning. The primary duty of a CIO is to ensure that IT delivers the required value during integration. They are often tasked with helping to retain business-as-usual functions for employees and navigate risks that may arise. CIOs must also combine the IT departments for all merging entities, including hardware, software and staffing resources, with the objective of cutting costs. For these reasons, M&A integration planning often ends with the CIO signing off on the integration before its execution.

But what if you don’t have a CIO? Many community banks don’t have someone in this role, as they’re not big enough to need, or simply cannot afford, a full-time CIO. Given the CIO’s critical role in M&A, community banks can engage a third-party IT advisor to fulfill this role and help ensure a successful transaction and integration.

Speak with Hartman Executive Advisors for More Information

The M&A integration planning process for banks can vary in length and complexity. There are many components to consider when planning for a major merger or acquisition and each situation is unique. Many businesses rely on M&A advisory professionals to help ensure that the transaction is efficient and completed with great attention to detail. With years of experience and tested project plans, our M&A advisory team can support banks through the entire integration planning process. For more information about M&A integration planning for banks, contact the experts at Hartman Executive Advisors.


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