Branch Purchase & Assumption – Banking Lawyer
At G. Ortega Law, we offer counsel for purchase and assumption agreements for community banks. When you’re ready to expand, a P&A deal can be a great solution for your institution. You may be wondering, “what is a purchase and assumption?” These deals are somewhat similar to acquisitions but do have some distinct differences. Unlike with an M&A deal, your institution can purchase specific assets. Additionally, purchase and assumptions are often less costly than acquiring an entire failing bank.
What is purchase and assumption? Also known as an FDIC-assisted acquisition, this is a transaction where a healthy bank purchases a failing institution’s assets and assumes their liabilities. The FDIC arranges this transaction by allowing FDIC-insured institutions. During a P&A, a healthy institution can purchase some or all the assets from a failing branch.
Some of the assets included in purchase and assumption deals include:
- Cash equivalents
- Branch premises, including:
- Marketable securities
Why choose purchase and assumption? These transactions are a great way to grow your institution. During a P&A, the failing branch’s accounts automatically transfer to your institution, meaning you gain new accounts and customers almost instantly. It also allows your institution to expand into new and strategic markets that may benefit your organization.
However, it’s important to seek counsel for banking P&A to help protect your interests. Our attorneys can help you determine the right course of action during a branch P&A deal. Purchase and assumption deals do come with liabilities, which means you must ensure the deal holds sufficient assets to cover any potential liabilities.
We have experience in banking, which helps us advise you on P&A deals and help you bid and negotiate with FDIC failing banks. Our attorneys are with you throughout the entire process, from bidding to closing, to offer guidance and counsel for banking P&A based on your institution’s goals.
Healthy Community Banks
Healthy community banks can benefit from branch purchase and assumption in many ways, such as gaining customers, acquiring assets at a discounted rate, and avoiding reorganization efforts common in mergers and acquisitions. Our attorneys offer counsel on banking P&A to help even the most complex deals go smoothly. Before you begin bidding on P&A deals, it’s important to develop a strategy that fits your institution’s mission and objectives. At G. Ortega Law, we advise you on a wide range of matters to help during P&A transactions, such as:
- Risk mitigation
- Regulatory compliance
- Due diligence
- Contract review and negotiation
- Updating risk ratings of loans
Our attorneys use our expertise in business, banking, and law to offer counsel for banking P&A deals to help your community bank successfully acquire assets and maximize profitability for your institution. Our focus is helping you attain your organizational goals. Contact us today if you’re interested in a purchase and assumption deal to discuss your options and receive practical counsel from our team.