In an era where the large money center and regional banks have been closing branches at a torrid pace and pushing cus-tomers to digital offerings, community banks have contin-ued to strive for personalized hands-on service and conve-nience. Despite the restrictive regulatory environment post Congress enacting Dodd-Frank, most community banks have remained resilient and endeavor to provide the vital fi-nancial services critical to the success of their communities. Now that the potential for relief from excessive regulatory complexity may be near, evidenced by recent U.S. Treasury recommendations for regulatory reform and the passing of the Financial CHOICE Act by the House, there is reason for community banks to be optimistic. Assuming a blue sky scenario where there is a new regula-tory paradigm coupled with accelerated economic growth from infrastructure spending stimulus and tax cuts, would-be buyers and sellers have to wrestle with how this impacts valuation and pricing expectations. Larger buyers are reti-cent to pay for the upside until more clarity emerges while potential sellers have seen their stock prices outperform (stock prices of Banks with assets between $500MM -$1B are up +35% since the election, outpacing their larger breth-ren) which has made the decision to sell more challenging given the enhanced value that’s been achieved on a stand-alone basis. Furthermore, the regulatory pendulum is about to swing back in favor of community banks as politicians have acknowledged that smaller banks have borne the brunt of the compliance burden which has favored larger institu-tions that are better able to absorb the costs. As articulated in the recent report released by the U.S. Department of the Treasury on June 12th, “Most critically, regulatory burdens must be appropriately tailored based on the size and com-plexity of a financial organization’s business model and take into account risk and impact.” Given the risks associated with M&A, many community banks find it to be an inoppor-tune time to pursue a sale at this point of the cycle given the value proposi-tion that it will be able to deliver going forward on a standalone basis. Buyers have not shown a willingness to pay for the full upside until further clarity emerges whether it be on the regulatory, fis-cal or economic front. As such, community bank-ing institutions should remain focused on realiz-DWAYNE S. SAFER IS ing their full potential by ASSISTANT PROFESSOR being community leaders OF FINANCE FOR THE and stimulating economic DEPARTMENT OF BUSINESS growth and development– AT MESSIAH COLLEGE. in doing so, their valua-HE CAN BE REACHED tion will also display its AT DSAFER@MESSIAH.EDU. leadership potential. PACB ASSOCIATE MEMBER SPOTLIGHT A STEVENS & LEE/GRIFFIN COMPANY 607 Washington St | Reading, PA 19601 Phone: (610) 478-2106 Website: www.griffinfingroup.com Contact: Mark McCollom Co-head Financial Institutions Group Email: firstname.lastname@example.org Griffin Financial Group is a Pennsylvania-based in-vestment bank specializing in assisting financial insti-tutions in understanding their strategic and financial alternatives, raising capital, facilitating and structur-ing M&A transactions and securitizing and selling assets, including troubled assets. Griffin also assists financial institutions in public offerings, institution-al placements, sales, syndication and other capital markets activities. Griffin also offers assistance with capital planning, strategic planning, non-depository M&A, branch purchases and sales, and other strate-gic matters. Through our unique platform, we also have the ability to assist our clients in attracting non-traditional sources of capital, including private equity funds, hedge funds and insurance companies, and in attracting strategic partners. Griffin has 40 investment bankers and is part of a professional services platform which consists of over 200 multidisciplinary professionals with occupational and educational diversity and broad and deep bank-ing sector experience. Our staff includes many former senior executive officers of both large and small de-pository institutions, specialty lenders and others in the sector with hands-on operating and transactional experience. Our in-house, industry-specific financial accounting and tax capabilities are unique among in-vestment banks specializing in the financial institu-tions sector. This platform gives us the ability to un-derstand our financial institution clients’ needs from their perspective and to develop innovative structures to address their challenges in a difficult regulatory and economic environment. Griffin has two Pennsylvania office locations -Valley Forge and Reading -as well as offices in New York City, Dallas/Fort Worth, TX and Norfolk, VA.