Insights Janney - Flipbook - Page 2
EVALUATING YOUR BANK’S WORTH
INSIGHTS
The second Trump administration has taken steps to expedite the bank merger
approval process, but at the same time, market volatility has impacted buyers’
stock currency. But ownership in a combined organization with strong staying
power can also be a good long-term value for sellers.
K EY ME TR ICS
85%
85% of bank leaders say an
attractive deposit base is a top
attribute in a potential target.
Source: Bank Director’s 2025 Bank
M&A Survey
Like many of its peers, FNCB Bancorp of Dunmore, Pennsylvania, was
KEY TAKEAWAYS
flush with cheap deposits in the years immediately following the Covid-19
pandemic and facing the prospect of another prolonged low-interest rate
• It’s widely expected that the regulatory
approval process should be smoother in
the near term. But market volatility can
effect deal pricing.
• Though deals may be completed at lower
nominal prices, stock ownership in the
combined organization can be a great
value for sellers if the pro forma bank has
long-term staying power.
• A well-diversified, low-cost deposit base
and complementary business lines can be
valuable attributes to bring to the table in
M&A discussions.
• In some cases, a bank merger may help
to solve questions around management
succession planning.
• Consider the timing of integration and how
that may impact financial metrics.
environment. That’s when leadership began to entertain the idea of M&A.
Management and the board were confident in the company’s growth strategy, but knew the bank, then around $1.7 billion in assets, needed scale if it
was going to survive in the long term. “We weren’t looking to just liquidate the
franchise,” says Jerry Champi, who was CEO of FNCB.
He cites a number of reasons that FNCB ultimately merged with Peoples
Financial Services Corp., which is based in nearby Scranton and had about
$3.7 billion in assets at the time. Complementary geographies would vault the
combined institution to a larger share of the greater Scranton market and also
provide for some easy cost savings post-closing.
The all-stock transaction was valued around $129 million, and FNCB shareholders received 0.12460 of common stock in the combined organization for
each share they owned. Peoples Financial Services was the surviving institution, but the two organizations viewed the deal as a merger of equals.
“Because we treated it as an MOE, there wasn’t a negotiation of premium,”
says Champi, now the CEO of Peoples Financial, with about $5.5 billion of assets.
Going Beyond the Price Tag
The second Trump administration has taken steps to expedite the approval
process for bank mergers, which spurred optimism that more deals would be announced. In the first quarter, 35 deals were announced, up from 29 in the prior
quarter and higher than the quarterly average going back to 2022, according to
2
