Community Bank CEOs: The Moment You Learn What Your Bank Is Really Worth
After months of preparation, meetings, and mountains of paperwork, the moment finally arrives.
Your investment banker calls with news: "The offers are in."
You feel the weight of the moment.
This is it—the moment you find out what the market really thinks your life's work is worth.
Will the numbers match your hopes?
Will anyone actually want to buy your bank?
Are you about to be disappointed or pleasantly surprised?
Here's what that moment feels like and why the numbers you see might not tell the whole story.
The Big Reveal
You've been through everything:
- Information gathered and organized
- Investment bankers researching and comparing your data
- Potential buyers found, contacted, and qualified
- One-on-one meetings completed
- NDAs signed by interested parties
- Confidential Information Memorandum created
- Virtual data room opened for buyer review
- Countless questions answered by your team
Now you're about to get the answer to the biggest question:
"What does the market think we're worth?"
Even though these are non-binding offers, they're serious proposals and real indicators of value.
The Reality of Interest vs. Action
Remember the difference between "confirmation yeses" and "commitment yeses"?
Confirmation yeses are polite responses with no real promise of action. Just people being nice.
Commitment yeses are the real deal—true agreements that lead to action.
Here's how it played out for us:
We had eleven parties express interest, sign NDAs, and start putting together offers to meet our deadline. Eleven interested parties was good news—it meant the market believed we had value.
But only five submitted actual written offers.
Five written offers out of eleven interested parties equals 45% follow-through.
That's actually pretty good.
The other six were "confirmation yeses"—55% who were just being polite or testing the waters.
Why Interested Parties Drop Out
The reasons the six opted out were similar to what we'd heard during initial outreach:
- Timing wasn't right
- Not enough ability to manage the deal right now
- Our market wasn't a good fit for them
- Core system conversion would interfere with timing
- Other strategic priorities took precedence
Sometimes it takes a "live fire" drill for buyers to realize now isn't their time.
An acquisition is a big step, and serious buyers need to be honest about their capacity.
We appreciated that they went as far as they did through the process.
They showed sincere interest, and we were grateful for that.
But now it was time to focus on the actual offers.
The Format That Enables Fair Comparison
Our investment bankers provided a specific format for submitting offers. This allowed for apples-to-apples comparison while giving each buyer room to add their unique "twist."
Some buyers focus on price.
Others emphasize cultural fit.
Some offer stock deals with upside potential.
Others prefer clean cash transactions.
The standardized format helps you see past the marketing language to understand what each buyer is really offering.
The Analysis Weekend
In our case, offers were due at close of business on Friday. This gave our investment bankers the weekend to tear apart each proposal.
They deconstructed every offer, asking follow-up questions to:
- Gain deeper understanding of specific elements
- Confirm their interpretation of terms
- Clarify any confusing language
- Understand the real conditions
They reported their findings to me verbally the following Monday.
Why Your Board Must Hear Everything Together
We scheduled an in-person board meeting the following Wednesday to review offers and analysis. The timing allowed for schedule coordination and banker travel.
Here's the critical part:
I didn't communicate anything about the offers to board members before that meeting.
Why?
Because I didn't want to influence anyone's understanding before they heard the complete analysis.
The board needed to hear all offers and the investment bankers' professional opinions at the same time.
This creates unbiased discussion and better decision-making.
The Questions That Matter Most
At this stage, you're asking two fundamental questions:
What is the value?
Do the offers reflect what you hoped your bank was worth?
Are they clustered together or wildly different?
Is it worth continuing?
Do any offers merit moving forward, or should you stay independent and keep building?
These aren't easy questions, and the answers might surprise you.
What the Numbers Really Mean
Remember that these are non-binding offers.
They're serious indicators of value, but there's still significant work ahead if you find offers worth pursuing.
The real value often emerges through negotiation and final terms.
Initial offers are starting points, not ending points.
Also consider what's not being offered. If you expected ten offers and got three, that tells you something about market conditions or your bank's appeal.
The Emotional Reality
This moment brings emotions you might not expect:
Relief - At least some buyers see value in what you've built
Anxiety - The numbers might not match your expectations
Pride - Serious buyers want your bank
Uncertainty - What happens next if you say yes to an offer?
All of these feelings are normal. You're not just selling assets—you're potentially ending your role in something you created.
What Success Actually Looks Like
Success at this stage isn't necessarily getting the highest offer.
Success is having multiple serious offers that give you real choices.
Competition among buyers drives value.
One great offer is good.
Multiple competitive offers are better.
The goal is to have enough quality options that you can negotiate from strength.
Keeping Perspective
It's crucial to remember what stage you're at.
You have initial expressions of interest, but you're nowhere near being done.
Major items still ahead:
- Detailed due diligence
- Final negotiations
- Regulatory approvals
- Shareholder voting
- Integration planning
Don't get ahead of yourself but do appreciate this milestone.
The Confidentiality Challenge
At this stage, absolutely no one outside your board and deal team should know you're evaluating offers.
The temptation to share good news is strong, but premature disclosure can kill deals and hurt your bank.
Stay focused and keep everything confidential until you have signed agreements.
Your Decision Framework
When evaluating this moment, consider:
- Are the offers in the range you expected?
- Do you have enough competition among buyers?
- Are the terms reasonable for serious consideration?
- Do any buyers seem like good cultural fits?
- Is the timing right for your bank and shareholders?
The Bottom Line
This moment—learning what buyers really think your bank is worth—is both thrilling and terrifying.
The numbers might exceed your expectations or fall short of your hopes.
Either outcome provides valuable information for your next decisions.
Remember that initial offers are just that—initial.
The real value emerges through skilled negotiation and final terms.
Most importantly, having serious offers means you've built something valuable that others want to own.
That's an achievement worth celebrating, regardless of what you ultimately decide to do.
Your Action Plan
- Manage expectations - Initial offers are starting points, not final values
- Focus on competition - Multiple offers create negotiating strength
- Maintain confidentiality - No one outside your deal team should know about offers
- Consider all factors - Price matters, but so do terms, timing, and cultural fit
- Prepare for what's next - If offers are acceptable, much work lies ahead
Remember: This moment reveals market value, but you still control whether to accept that value or keep building independently.
P.S. I'm not a lawyer, an accountant, or an investment banker. Just a former bank CEO who has been in your shoes.
There are zero hacks or tricks in this newsletter. Just proven tactics that help you choose the right path for your bank.
Your path will:
- Inform your strategic plan.
- Guide your annual business plan and budget.
- Clarify priorities.
- Define your message so it can be communicated with confidence.
This is how savvy bankers navigate.
They build smart and valuable banks and choose the best time to sell on a timeline of their own choosing – serving the needs of the shareholders and the board.
I’ll see you next week.
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