Mergers – Madness or Magic?

There were a lot of U.S. bank mergers & acquisitions (M&As) in 2025 – over 170, according to American Banker, which is a significant increase from prior years – and there are still more pending as we go into the new year.

We’ve written about the impact of mergers on SBA Lending teams before (in a three-part series starting here), and today we’re taking another look. If your bank is either being acquired, or doing the acquiring, what can you expect, what should you look out for, and how can you prepare?

Are you strategic – or “non-core”?

SBA departments are often re-assessed as part of an M&A transaction. 

You’ll have a better chance being viewed as strategic if you make sure that:

• You’ve reviewed your lending portfolio and it’s solidly profitable, you have no outstanding issues flagged on SBA form 1502 reports nor any screen-outs pending, and you’re considered fully SBA-compliant based on the applicable SBA SOP.

• Your execution on the secondary market is strong.

• You have low repair and repurchase rates.

• And your SBA portfolio fits well within the combined bank’s overall business.

Are you prepared to minimize disruption?

Things are going to be different for both banks’ teams. If your documentation is solid, this disruption can be minimized. Policies and procedures should be detailed, well-documented, and validated as current with actual processes and with the latest SBA SOP.

• Review and revise your credit policies as needed

• And your underwriting processes.

• And double-check your checklists (!)

Make sure you have plans in place to communicate with your Borrowers about what’s happening. When banks merge, there’s often a slowdown in loan servicing. You don’t want to end up with unhappy Borrowers who don’t know what’s going on.

Staffing!

There’s understandably significant staff anxiety when companies merge, and it’s probable that some of the staff will leave (perhaps not all voluntarily). This means your remaining team may be overloaded as they pick up the slack, while also still being concerned about what’s going to happen going forward.

Plan ahead for:

• Communication. Even if the news isn’t great, knowing what’s likely to happen is better than being left in the dark. Your people aren’t mushrooms!

• SBA training to bring everyone into alignment about process and procedure in the new merged world.

• Knowledge management, because when senior team members leave, essential knowledge often goes with them.

How to manage it all

• If you have influence over how the merger is happening, make sure SBA Lending is evaluated separately from conventional lending.

• Validate the merged team’s understanding of SBA SOP and level-set procedures in general.

• Plan for outside training support to bring the team into alignment. Bringing in external SBA training expertise helps avoid “us versus them” feelings.

This is, of course, where we here at LRM Lender Consultants are ideally equipped to help. Whether it’s pre-merge SBA loan reviews, support to validate processes and procedures against the SBA SOP, SBA training or guidance around SBA Form 1502 reporting – we’re here for you in a time that’s always stressful and filled with uncertainty. Give us a call at 877-576-0819, or contact us through this link. We’re ready to help!

And for more in-depth thought on surviving (thriving!) through a merger, we did a three-part series last year; here’s the link to the first article.