Community Bank CEOs: How We Went from Buyer to Seller (and Won Big)
Sometimes the best strategy is the one you never saw coming.
In 2017, we were hunting for banks to buy.
By 2022, we were the ones getting bought—and it was the best decision we ever made.
Here's the story of how we built a bank so strong that when plans changed, we had options.
And why every community bank CEO needs to think the same way.
When Everything Goes According to Plan (Until It Doesn't)
Picture our situation in 2017:
We were eleven years old and growing fast.
Maybe too fast.
Our loan-to-deposit ratio was running over 100%.
We had borrowed $40 million from the Federal Home Loan Bank just to keep up with demand.
Another $60 million sat tied up in bonds that were underwater.
But business was booming.
The 2016 election had given business owners new confidence.
They were finally investing again.
Loan demand was through the roof.
We had a problem many banks would love to have:
Too much loan demand and not enough deposits to fund it.
The Hunt for the Perfect Partner
Our solution seemed obvious—find a bank to buy that had what we needed.
We wanted a rural bank with:
- Long history in their community
- Strong, diverse deposit base
- Low loan-to-deposit ratio (around 50%)
- Aging management team looking for succession
The math was simple:
They had cheap deposits sitting around earning low returns.
We had loan demand we couldn't fund.
Together, we could serve more customers and make more money.
Our management team was young (all under 40) and hungry.
The industry average was 65.
We knew succession planning was a huge issue for smaller banks.
We built our target model, ran call reports, and created our top 10 list.
Through 2018, we started quiet conversations to see who might be interested.
When the Market Changes Everything
Then in August 2018 the bond market shifted.
Suddenly we could sell those $60 million in underwater bonds—for a gain.
In one month, we paid off our entire $40 million FHLB line and completely transformed our balance sheet.
Our whole acquisition strategy needed rethinking.
The Curveball Years
We spent 2019 recalibrating.
New model, new targets, new plan for 2020.
Then COVID hit.
Every conversation stopped.
2021 brought hope.
Vaccines rolled out.
People started gathering again.
Loan pipelines filled up.
Then Delta variant concerns arose.
Then Omicron.
By late 2021, we had to take another hard look at what we had begun in 2017.
Did that plan still fit?
The Question That Changed Everything
That's when our board asked the biggest question:
"What are ALL of our options?"
Should we:
- Keep growing organically?
- Buy another bank?
- Merge with someone our size?
- Or maybe... sell?
We decided to explore every path.
We hired an investment banker we trusted to help us understand our choices.
The twist?
We ended up selling when we started out looking to buy.
Why We Won (And How You Can Too)
Here's the secret:
We had built a bank we could own forever or sell tomorrow.
When opportunities shifted, we had options because we had built something valuable.
That's the real lesson.
Not the specific strategy we chose, but the flexibility we created by building a strong bank from day one.
The Preparation That Paid Off
From the beginning, we thought like potential sellers even when we weren't selling.
This mindset shaped every decision:
We built young, strong management - Buyers love banks that don't depend on one person
We focused on sustainable growth - Not just any growth, but profitable, manageable growth
We maintained clean books - Every loan, every process, every report was buyer-ready
We understood our value drivers - We knew what made us attractive and protected it
When the investment banker evaluated us, there were no surprises.
No scrambling to fix problems.
No wondering "what if we had done this differently?"
The Mistake Most CEOs Make
Most bank leaders wait until they want to sell to start preparing for a sale.
That's backwards.
By then, you're stuck with whatever bank you built.
You can't go back and create the management team you should have developed.
You can't undo years of risky lending.
You can't suddenly become the bank buyers want.
The time to prepare for a sale is when you're not selling.
What "Buyer-Ready" Really Means
Building a bank you can sell tomorrow doesn't mean you're planning to sell.
It means you're building something so strong that selling becomes a choice, not a necessity.
When you think this way, every decision gets better:
- Hiring becomes more strategic
- Risk management improves
- Growth becomes more sustainable
- Leadership development accelerates
You're not just building a bank.
You're building options.
The Questions You Should Ask Today
If your board walked in tomorrow and said, "We want to explore a sale," could you confidently say yes to these questions:
- Do you know what your bank is worth?
- Could your team run the bank without you for six months?
- Are your loan files clean enough for due diligence?
- Do you understand the sale process and timeline?
- Could you manage a confidential sale while running the bank?
If any answer is "no," you have work to do.
Our Results (And What They Mean for You)
Our sale worked because we were prepared.
We had multiple buyers.
Room to negotiate.
A clear story about our value.
The result?
Our shareholders beat the S&P 500.
Our employees got better opportunities.
Our customers got expanded services.
The buyer got exactly what they wanted.
Everybody won.
That only happens when you build something truly valuable.
Your Next Move
You don't need to hire investment bankers tomorrow.
But you do need to start thinking differently.
Ask yourself:
Are we building a bank we could own forever or sell tomorrow?
If the answer is no, what needs to change?
The Bottom Line
The best community banks are always ready for anything.
Market changes, competitive threats, unexpected opportunities, they can handle whatever comes their way.
Not because they're trying to sell, but because they're built to last and built to win.
Whether you grow, acquire, merge, or sell, you'll do it from a position of strength.
And in banking, strength is everything.
Your Action Plan:
1) Assess your readiness: Could you sell tomorrow if you had to?
2) Identify weaknesses: What would embarrass you in due diligence?
3) Build your team: Can they run the bank without you?
4) Know your story: What makes your bank special?
5) Stay flexible: Keep all options open
Remember:
The strongest banks aren't the ones planning to sell.
They're the ones that could sell anytime they choose.
There are no shortcuts or hacks in building the confidence needed for major strategic decisions.
Just proven approaches centered around preparation:
This approach will:
- Inform your strategic planning
- Guide your resource allocation
- Clarify your priorities
- Define your value proposition
This is how savvy bank leaders operate.
They build valuable institutions through preparation, allowing them to choose the optimal path forward on their own timeline – whether that's continued independence or a strategic transaction.
I’ll see you next week.
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