Community Bank CEOs: How to Test Buyer Interest Without Word Getting Out
You've made the decision to explore selling your bank.
You've hired an investment banker.
The board is ready to test the market.
Now comes the question that keeps you awake at night: "Who's actually interested in buying us?"
Here's how smart money finds out—without letting the whole industry know you're thinking about selling.
The Problem That Makes or Breaks Deals
Every bank sale faces the same challenge: You need to find interested buyers.
But you can't let everyone know you're selling.
Word gets out too early?
Your employees panic.
Your customers worry.
Your competitors circle like sharks.
But stay too quiet?
You miss potential buyers and limit your options.
Smart investment bankers have solved this puzzle.
Here's how they do it.
Why You Can't Do This Yourself
Let's be clear about something:
You cannot create serious buyer interest on your own.
Think about it.
If you call another bank CEO and say, "Hey, would you be interested in buying us?"
What happens next?
Word spreads instantly.
Even if they say no, they'll tell someone.
And that someone will tell someone else.
Within a week, half the industry knows you're shopping your bank.
Investment bankers solve this problem.
They have relationships and trust that you don't have in this situation.
The Simple Framework That Drives Results
Professional investment bankers use a proven sales model to find buyers:
Attention, Interest, Desire, and Action.
Attention: Getting potential buyers to take the call and listen
Interest: Moving them from listening to wanting to know more
Desire: Taking them from "that's interesting" to "we want that bank"
Action: Getting them to submit a serious offer
Most CEOs think this process starts with the bank being for sale.
It doesn't.
It starts years earlier.
Investment bankers build relationships and trust with potential buyers.
The Secret Conversation That Changes Everything
Here's how the initial buyer outreach actually works:
Your investment banker calls potential buyers with a message like this:
"We have a possible deal in a major Midwest metro market.
- The bank has about $250 million in assets.
- They focus on business lending, working capital lines, term loans, and owner-occupied real estate.
- Strong cash management business.
- The management team is a real strength—young, capable, and can help with succession planning.
- They have change-in-control agreements in place.
- The board understands the power of scale.
- They're exploring strategic options, with a sale being one possibility.
- Strong bank, good earnings, solid team in a high-growth market that fits your footprint nicely.
We thought of you.
Are you interested?"
Notice what's missing?
Your name.
Your exact location.
Anything that identifies you.
But notice what's included?
Everything a serious buyer needs to know to decide if they want to learn more.
Why This Approach Protects You
This approach serves multiple purposes:
Keeps secrets: No one knows it's your bank being discussed
Finds serious buyers: Only really interested parties move forward
Saves relationships: If someone says no, they don't know they're rejecting you
Gathers intel: Your banker learns what buyers are really looking for
The buyers who respond positively have already shown they're really interested in your type of bank.
The Trust Advantage You Can't Buy
Here's why this process works for investment bankers but wouldn't work for you:
Serious buyers take these calls because they have ongoing relationships with the investment banker.
They know if they say no to this deal, they'll miss out on hearing about future opportunities.
These bankers call with deals regularly.
Buyers want to stay in their good graces.
That trust and reputation took years to build. You can't create it overnight.
Don't Overthink the Early Stage
At this point in the process, don't be too picky about who gets contacted.
You might think, "There's no way we'd ever want to be part of that bank. We've been competitors for years."
Or "They're way too big. They'd never be interested in us."
Stop.
This isn't the time for those decisions.
Your job right now is to find out who's interested.
Not to decide who you like.
Here's why:
- Banks you think are "too big" might be trying to enter your market
- Competitors might actually be the best fit
- Someone you never considered might offer the best terms
- Banks you think are perfect might not be interested
Keep your options open.
You can be picky later when you have actual offers to compare.
What Happens When Your "Dream Buyer" Says No
This will probably happen.
The bank you thought was perfect might pass on the opportunity.
Don't panic.
Don't assume it's because they don't like your bank.
They might be:
- Already working on another deal
- Dealing with regulatory issues
- In the middle of system changes
- Focused on a different area
- Taking a break from buying banks
It's usually about their situation, not yours.
Your investment banker might suggest calling them back later in the process.
Sometimes timing changes during a six-month sale process.
The Hard Work Reality
This initial outreach phase is exhausting for investment bankers.
Lots of phone calls, emails, follow-ups, and more follow-ups.
But it's also where they earn their fees.
Each conversation provides valuable information:
- Who's actively looking to buy?
- What are buyers willing to pay?
- What features are most attractive?
- Which markets are hottest?
- What deal terms are buyers expecting?
This information helps position your bank better as the process moves forward.
Why More Is Better
At this stage, you want as many interested parties as possible.
Don't worry about perfect fits.
Focus on real interest.
The more buyers in your process, the better your power when negotiations begin.
Some will drop out as they learn more details.
Others will emerge as serious contenders.
But you can't predict who will still be standing at the end.
Start with everyone who shows interest.
The Next Stage Preview
Once buyers express interest in the basic description, the process moves to the next level.
They'll want more details.
Your banker will share more information (still without revealing your identity).
Eventually, interested parties will sign confidentiality agreements and learn who you are.
But that's a topic for another discussion.
For now, focus on casting the widest possible net of really interested buyers.
Your Preparation Homework
While your investment banker is making these calls, you can prepare.
Think through how your bank would sound in that basic description.
Fill in this template:
“We have an opportunity for a possible acquisition by your bank in a _______________ market. The size of the bank is approximately $_____________. The bank focus is on __________________________________________________________. The management team is _________________________________________. The board is exploring strategic options, a sale being one of them as they understand the power of scale. [Strong] bank, [good] earner, [solid] team in a [high growth] market that fits nicely with your [footprint]. We thought of you. Are you interested?”
How does your bank sound?
What strengths stand out?
What weaknesses become obvious?
This exercise might reveal areas you could strengthen before going to market.
The Bottom Line
Finding serious buyers without revealing your identity is both an art and a science.
It requires relationships, trust, and experience that take years to develop.
That's why hiring the right investment banker matters so much.
They don't just manage the process—they make the process possible.
Your Action Plan
1) Map potential buyers - List banks 5-7 times your size in your region
2) Check relationships - How many CEOs on that list do you know personally?
3) Practice your pitch - Use the template above to describe your bank without naming it
4) Trust the process - Let your banker handle initial outreach without managing every detail
5) Stay open-minded - Don't eliminate potential buyers too early
Remember:
The goal right now isn't finding the perfect buyer.
It's finding all the interested buyers.
You can choose among them later.
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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