Our mergers and acquisitions practice involves representing both buyers and sellers in a broad range of transactions.  We assist our clients early on in the mergers and acquisitions process by advising boards of directors of their fiduciary duties in the context of a transaction, negotiating the terms of letters of interest, drafting confidentiality agreements, and reviewing presentations by investment banking firms.  Once a letter of interest or term sheet has been accepted, we are actively involved in due diligence, drafting the definitive merger agreement, preparing press releases and filing applications and registration statements with the bank regulatory agencies and SEC, respectively.  Because executive compensation and benefits issues are a key part of any successful merger transaction, our Executive Compensation and Employee Benefits group is actively involved in all phases of a merger transaction. We have completed more than 150 merger transactions in the past 10 years.  As a result, there are very few transactions that would present novel issues or structures for us.  We represent both commercial banks and savings banks, as well as their holding companies.  We also represent mutual savings institutions and mutual holding companies in mergers with or acquisitions of other mutual and stock financial institutions.  We have represented mutual holding companies and mutual savings institutions that have acquired credit unions, as well as savings banks that have been acquired by credit unions.

Stock Company Mergers and Combinations

We work closely with our clients and their financial advisors at the early stages of a merger by preparing confidentiality agreements, advising on deal structure and tax matters, as well as the terms of any letter of interest. We assist our clients in performing due diligence on potential merger partners, identifying and addressing any potential regulatory issues, negotiating the terms of merger agreements, and registering with the SEC common stock that is used as merger consideration by an acquiror.  The federal and state banking regulatory agencies that oversee bank and bank holding company mergers add an additional layer of complexity to merger transactions.  We have extensive experience and a dedicated team that prepares and files the necessary applications to obtain approval from the federal and state bank regulatory agencies, as well as guiding merger applications through multiple regulatory bodies.  We also guide our clients through the process of acquiring non-banking trust, investment advisory/brokerage and insurance firms.

Mutual Mergers and Combinations

Mergers between mutual savings institutions have become much more common in recent years, particularly among smaller institutions that have determined they cannot sustain the high cost of regulation resulting from the Dodd-Frank Act.  Mutual-to-mutual mergers may seem relatively simple to complete since no stockholders are involved and, therefore, no financial consideration passes between the buyer and seller.  However, mutual-to-mutual mergers often involve complicated management and succession issues, as well as employment and benefits related issues, that are challenging to both parties.  Under federal law, only mutual savings institutions and mutual holding companies may acquire or merge with other mutual institutions or mutual holding companies, so the universe of potential partners in these transactions is usually quite limited.  Luse Gorman has represented mutual banks and mutual holding companies in over 25 transactions involving the mergers of mutual institutions with other mutual institutions or mutual holding companies.

Branch and Asset Purchases

Branch and asset purchase transactions often present significant growth opportunities for both mutual and stock-owned community banks.  In recent years, many larger banking organizations have sold branches either for strategic purposes or as part of merger transactions.  The buyer in the branch sales is often a community bank that has growth plans in the market being vacated by the larger bank.  Luse Gorman represents both buyers and sellers in branch sales transactions.

FDIC-Assisted and Supervisory Acquisitions

FDIC-assisted supervisory acquisitions reached a high point in a number of states in the wake of the 2008-2009 financial crisis.  While FDIC-assisted transactions have decreased significantly in recent years, they still occur periodically.  Taking advantage of these transactions requires a knowledge of the parameters involved, an understanding of the most likely way to be the winning bidder, and the regulatory offices of the FDIC that would be involved in processing these transactions.  Luse Gorman has worked with clients in completing a number of FDIC-assisted transactions since 2009, and we can help clients understand the mechanics and well as the financial components that make up a successful bid.

In addition to FDIC-assisted supervisory acquisitions, a number of banks are acquired in a supervisory acquisition process whereby no FDIC financial assistance is provided to the acquiring bank.  To be successful, these transactions require an understanding of the parameters that will be considered acceptable by the federal banking regulators, as well as the pro forma impact of the supervisory acquisition on the financial condition of the acquiror.  We have advised both mutual- and stock-owned community banks in their supervisory acquisitions of failing community banks.