Robin Trehan, stipulated the Steps to buying a small bank.

July 18, 2008 - PRLog -- Robin Trehan while chairing the meeting at Credit capital expressed that -Every battle is won before it is ever fought. Same goes for while buying a bank or financial institution. A deal can have a hidden value and how one breaks the value and brings in the value is up to the buyer to realize. Here are series of steps I will suggest once one has identified a bank and it fits the initial criteria.

1. Putting an offer sheet with basic terms and conditions for the due diligence.

2. If the offer is accepted hiring a good law firm and accounting firm for the preparation of

1. Definitive Agreement.
2. Doing due diligence.

3. During the due diligence process, following questions should be put in picture.

• A copy of audited financial statements for the past three years.
• Does the bank own or lease the space that it occupies? If it leases the space, what is the remaining term?
• Regarding the loan on the book, provide a breakdown by type, rates, and maturity.
• The investment the bank owns. The breakdown by type, rates, and maturity.
• The deposit on the book. The breakdown by type, rates, and maturity.
• A brief description of the customers.
• Who is the present management and how the bank board is organized.
• A list of shareholders.
• Analysis of CAMELS- Capital, Asset quality, Management, Earning, Liquidity and sensitivity to market risk.

4. After the acceptance of the Definitive Agreement buyer places money in escrow.

5. Buyers seek regulatory approval within 5-10 days after the execution of the Definitive Agreement.

6. Seller seeks its shareholders approval to the transaction as soon as the Definitive Agreement is executed and the deposit of funds is received.

7. Buyer has to in the mean time get the regulatory approval.

8. Closing take place and if possible making sure that present management stays there for two to three months. Best deals are sometimes derived and made. Stick to the fundamentals, good things sometimes takes time, and lots of hard work.

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Investment banking for mid market Mergers & Acquisition Specialists. A Global Private Equity and Asset Management Firm.
Credit Capital Funding is an alternative asset management and advisory firm with a focus on equity investments in middle-market companies and real estate that hold significant opportunities to create value.

Our private equity funds seek to realize superior capital gains by investing in consolidating, fragmented industries by partnering with strong management teams to build companies through acquisitions and internal growth, while our private equity real estate funds focus on acquiring under appraised assets and development opportunities in metro markets.