What Overbanked Chicago Augurs for the Future of M&A


American Banker | August 22, 2016

The American Banker article, “What Overbanked Chicago Augurs for the Future of M&A,” quoted Russell Reynolds Associates' Robert Voth about the state of M&A in the Chicago banking industry and what banks look for when recruiting talent. The article is excerpted below.​

Chicago is often favorably described as the city of neighborhoods, and in banking circles it has a similar reputation for multiplicity – except that's not necessarily a compliment in banking.

Unit banking laws that remained intact into the1960s fostered scads of single-branch community banks. The Windy City landscape is still littered with small, privately held banks as a result. It has always been assumed that many of them could not survive and would have to sell themselves, and to be sure the Chicagoland area has seen its share of M&A in recent years.

But the more obvious deals, the ones that follow the traditional pattern of big fish buys small, have been done, and that reality raises several questions about the nature of M&A in Chicago and other oversupplied markets around the country.


What will happen to all the bank employees?

Regardless of what further Chicago merger activity takes place, there could be a shake-up of talent from the pending deals alone. Competitors may lure talented lenders away.

Banks are especially keen to recruit employees with strong ties to customers in commercial lending and treasury services, said Robert Voth, a leader in the consumer and commercial financial services practice at Russell Reynolds Associates.

However, bankers are often loyal to their current employers, so a competitor looking to pick up talent needs to show it can provide a better opportunity with its platform, products and services or reputation, Voth said.

"Bankers tend to be parochial by nature," Voth added. "They don't want to move but may if their current bank lacks products or there is a truly golden opportunity on the other side."

To read the full article, click here.

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What Overbanked Chicago Augurs for the Future of M&A