Posted October 2011

Strategic Ownership Planning

By The Capital Corporation, LLC

As you are aware, The Capital Corporation works with a large number of banks in the Midwest.  While we are known for mergers and acquisitions, we actually spend a lot of our time consulting with bank ownership, boards and management on strategic issues.

One of the topics that we have increasingly been involved with lately is succession.  The regulators over the past several years have required that banks address management and board succession, but largely have ignored ownership succession. 

We have recently worked with bank ownership groups to provide liquidity for estate planning purposes, buying out minority shareholders, and generational transfers of ownership.  Strategic ownership planning can go in several different directions.

We believe that strategic ownership succession is very important to owners to protect the value of their investment, but also important to boards and management to provide for an organized transition of ownership without negatively impacting the operation of the institution



Strategic ownership planning is a formalized process to allow the existing ownership of a bank or bank holding company the opportunity to review the ownership structure and develop a plan for any desired or required changes in such structure for the near and long term.  The process should allow the personal goals and objectives of the ownership group to be met.



► Organizations that are closely held and/or family owned;


► Organizations that need to buy out minority shareholders for estate planning or other cash needs;


► Organizations that have shareholders interested in an exit strategy in the near term;


► Organizations concerned about attracting talented management;


► Organizations that wish to remain independent;


► Organizations that wish to plan ahead for a future sale or liquidity event.


The strategic ownership planning process should include, but not be limited to, the following:


► An analysis of the ownership as it is today;


► An identification of what the future ownership will look like;


► An analysis of alternatives available to accomplish the desired ownership;


► Selection of the best alternatives to accomplish the desired ownership;


► Implement timeframes with accountability for the alternatives selected;


► Ongoing review and evaluation in order to maintain desired ownership structure.

 If you believe your organization would benefit from strategic ownership planning, please call or email us.  We would be happy to discuss this issue or any other issue with you.  In today’s environment, it is more important than ever for banks to have a plan and execute on that plan.   We are firm believers in the community bank system because of its impact on the economy and the benefits that banks bring to their local markets

The next few years in banking will continue to be challenging for the industry as a whole, but it will create great opportunities for strong, well capitalized organizations.  No matter where you are in the spectrum you must have a plan to move forward and devote the time, energy and thought to the execution of that plan.

We have been involved with many institutions and their owners on these types of projects and have the experience to assist you in developing a plan that fits your individual needs.  If you have any questions or comments, please feel free to give us a call.  We look forward to hearing from you.