Why Is This Tiny Wyoming Bank Listed Like a Used Car?
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I have always dreamt of owning a bank.

Like they are such good businesses. It's not as great as it sounds. I think it's a tough business to be in, really. I don't think Chase, you know, and Wells Fargo and Bank of America are probably like really gunning for this area. And it's more trouble than it's worth to go try and compete this business away. So that is a goal for all listeners. You want to get to the level of wealth where your next step in life is to buy a bank. This is Acquisition Anonymous.

Hello, another episode of Acquisitions Anonymous. We don't have 100% beard anymore. And thumbs down on just the plus inventory alone. Today's episode of Acquisitions Anonymous is an exciting one. We went through and talked about a bank in a state that will kind of make you scratch your head because it's a state that's not very common. So Mills brought this deal, really dug into it real quickly, and then we came to a pretty quick conclusion about it. So follow along and here's the episode.

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I am so excited. I tease this for Heather and Chelsea, but I have a deal that is going to blow your socks off, Michael. And I'm going to jump right into it because this is going to be quick because there's not that much detail, but it is pretty interesting. Okay. This is on deal stream. It is a bank for sale in Wyoming. The asking price is $43 million. Okay.

And there are very sparse details, but it says this is a great opportunity to buy a bank for sale in the United States of America. Establish bank for sale in Wyoming. The listing has been up since November 9th of 2023.

They have an S charter, which I have no idea what that means, but we have our resident banker here with us. The assets are between $200 million and $300 million U.S. dollars. It's in Wyoming, and they say the city or location will be disclosed after execution of NDA. Okay.

A fully operational bank is for sale. Qualified buyer is someone that provides proof of funds. Proof of funds is a letter from a well-known bank or brokerage firm. Please do not send a corporate bond, bank guarantee, SBLC, et cetera. And that is all we know about it. Are you guys excited or is it just me? It might just be you. Okay.

I have always dreamt of owning a bank. Haven't we all? They are such good businesses. Because, I mean, what has happened, I don't know if you guys have looked at it, but over the past like 50 years, the number of banks in the United States has gone down by like an order of magnitude. Like we used to have like 30,000 banks. I'm just using rough numbers here, but like we went from like 30,000 to like 5,000. Somebody please fact check Michael for us. No, he's right. He's right. And I can give you context on why it's going to keep happening.

you know it's gonna keep happening it's hard the second thing is yeah all the richest people in san antonio they own banks like they all have made money doing something then they went and bought a bank like at over and over and over again so anyway that's why that's why i'm super excited about this so anyway go ahead

I see. I hear a lot of people say what you just said, Michael, that have been successful in business and they want to own a bank and they'll talk to me about it. And I tell them, having been in banks as long as I have, that is the last business I would want to run. It is very complicated because it's the deposit side. It's the loan side. You know, there's a very thin margin for error when you make loans. You can't.

sustained losses. Things happen, right? You can easily make bad bets on loans. You've got a net interest margin between what you're paying for deposits and what you're getting from loans. It's a really tricky, tricky business. Frankly, if you look at the stock market at the banks, it's not a great place to invest your money there. I just think

It's not as great as it sounds. I think it's a tough business to be in, really.

Well, and so the reality is that part of the consolidation that's happened is that smaller banks are under the same or similar regulatory and compliance burden as bigger banks. Now, with like, you know, Sarbanes-Oxley and the Glass-Steagall Act and all these different like bank regulations that have come out, it's mainly aimed at consumer protection and making sure that like

With Sarbanes-Oxley, it was that the bank isn't also running an investment bank and using your deposits to go make speculative bets. But a lot of this now is like, you know, anti money laundering, anti like terrorist provisions, you know, all these different things. And small community banks, while they were great businesses and really sticky customer relationships and like good deposits, and they were very conservative in the way that they lent money out.

All those banks now are getting gobbled up in the kind of heyday of, hey, we have the same regulatory burden, whether we have $50 billion in assets or $1 billion in assets, so let's grow. There are some tiers where regulations increase. Yeah, there are some tiers. But you're right. In general, you can be crushed by regulation being too small in banking.

The other dynamic that I don't like about this, but that banks just, if you own a bank, this is the world you live in, is that the banks have gotten good at at least making money or staying somewhat profitable in a low interest rate environment where the spread of what they're borrowing funds for, you know, and then lending them out to you is very narrow. In a rising interest rate environment, the bank has a lot more room to work with. You know, they're not just getting that small spread, but,

are very tuned into what the Federal Reserve does and, you know, like what hint did they drop in the pre-meeting minutes about what they might do? And, you know, then politics overlay. It's a very, very interesting environment and not one that I would want to be like the bank president, you know, and navigating that, but maybe just like a shareholder and a board member kind of thing. Yeah. And by the way, the charter S, that

That's a state charter, I believe. That's what they're saying there. So you could be a federally chartered bank or state chartered bank. And then there's, you know, there's the whole world of credit unions because they have their own set of rules and they actually can operate without paying taxes. And banks get mad about that and kind of jealous about the rules there.

It's a very complex web. It's a good thing, I think, in this country that we have so many banks, though, even though it is consolidating and shrinking through the years. If you look at other countries, Canada, for example, they just have a few banks. That's the environment. And once you get to that point...

You know, your options are just so few. You know, it becomes a completely different game for the consumers of banks, whether they're businesses or individuals. And so I think we're really still very fortunate in this country that we still have an environment that allows for a lot of banks, even though the number is shrinking.

Hi, Heather here. When I'm not breaking down deals with these guys, I'm helping people get the right SBA loans for their business acquisitions. Because when you're buying a business, the best financing isn't one size fits all. There's the best rate, fastest to close, the specific loan structure that you need, or a little of all of those things. That's why my company, Viso Business Capital, works with over...

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So I had a buddy who tried to buy a pretty similar bank like this. And he comes from a long experience in banking, all that kind of stuff. And it was a nightmare. Like they went through the process of

finding the right bank, signing a contract over six months, eventually with the bank to sell itself, getting a reasonable deal, I think, and then having a business plan that I thought was pretty good. Then they spent nine months raising all the money and getting all the commitments to do the purchase. And then it went to the FDIC to approve. And I think it's the FDIC, whoever the regulator was, went to the FDIC to approve the thing. And

And like six months later, they're like, nope, sorry, we're not going to do it. You're not cool. We're not good with this consolidation. You guys aren't the right owners for this bank. And then somebody else swooped in and bought the bank for the same price. So the guy just wasted like three years putting it all together. Just total nightmare situation. I was like, I don't know why you're signing up for this, my friend. But he did. And it sucked. What I find fascinating is this is a bank being listed online? Yeah.

They never, right. Like a public listing. Never. I don't think I've ever seen that. Yeah. That's why I caught my eye because you don't really see things like this, but you know, I, I think when they're saying they want proof of funds, you know, I don't, I don't know that you can borrow money to buy a bank. So I think that this is like all cash deal. Um, and yeah,

One thing I like about it is that it's probably in a very rural area. And, you know, I don't think Chase, you know, and Wells Fargo and Bank of America are probably like really gunning for this area. And it's more trouble than it's worth to go try and compete this business away. So could it function like a bond and you just kind of clip a coupon? Yeah, but it's

To Michael's point earlier, you could spend a ton of time on this and you don't have the right pedigree. You don't have the right connections at the Federal Reserve and you waste a bunch of time and money. I think you would have to have a ton of – you're probably like a retired bank president and you're going to an investor base and it's just an all-cash deal. That's exactly what they do. Yeah, that's how these things trade is somebody who knows how to run a bank and has a proven track record puts together an investment plan.

pool and acquires banks. I have no idea how they're valuing this though. All they're telling us is asset size and that doesn't tell us what the earnings are, what the net interest margin is, and what kind of book of business does this bank have? It's pretty tiny. But like you said, clip a coupon. Well, it kind of depends. What is their niche? Who do they serve? What does that look like? That really tells you a lot about a bank of this size because it's really tiny. Yeah.

One nice thing about something like this is that there are a ton of publicly traded bank comps. So you could go and say when you like, let's say you sign the NDA and you look at this, you can see what like the majority of the universe, you know, in the United States is.

what their company performance is like. Is this company a top tier performer or are they in the bottom decile? You could get some good data in publicly available information about the company. You can get it even when they're not publicly traded, by the way, just because they are banks.

So there's a database, and I'm going to forget the website that I use, but you can even get the privately held banks, like the Novo startup banks that haven't gone public yet. Interesting. Because they have to report everything to the government. So you're actually able to see, you know, a lot about... That's why they're probably not telling us much, because if we knew much, we would be able to probably pull it up and find out everything about this bank. But what I find curious is why...

Why is being listed like this? So sketchy. This is odd. Yeah, it makes no sense. Well, can I talk about the other thing that absolutely sucks about this bank? Like it's in Wyoming. There's 500,000 people in Wyoming and rural Wyoming, like rural the rest of the United States is not gaining people. People are not moving to BFE. Like the cities are winning. The match is over, right? Everybody's moving to bigger cities.

And, like, you're going to have all the problems running a bank like this that you have running any other business in a tiny town. The biggest town in Wyoming is 65,000 people. It's Casper. And it's only probably still there because it's close to Colorado. And, like, I think you're running into a situation where you're going to have just all of this absolute headache. And, yeah, I don't know. For that reason, I'm out.

Are we not doing Shark Tank today? No, we are. So I almost could have, like, I was picturing Chelsea turning into the Monopoly man and like, you know, twisting the white mustache and like she was really excited about it and you just burst her bubble.

Oh, I'm sorry, Chelsea. We're so glad you're here. What do you think of this bank? It honestly, as we were like looking at it, it reminded me of the healthcare consolidation that happened where rural hospitals were suddenly like, come by me. I can't survive back in 2011. I can't survive under these new regulations. And so I'm, I have literally never seen a bank for sale on a listing site. And so I don't know if that's part of it or if there's a

desire for like they hope someone strategic sees them and wants to branch out in rural Wyoming. It's a hot market according to Michael Girdley so everyone should want this business. I just think it's super bizarre but I can honestly say I've never thought or read or considered the idea of buying a bank so that is a goal for all listeners. You want to get to the level of wealth where your next step in life is to buy a bank.

And I still say no, even at that point. Look, I'm on the other side of this because, I mean, I know, Heather, you worked in a bank, so you have a different experience. I've watched the people on the other side who've been involved in de novo banks and blot banks. Like, I've seen and heard of people just absolutely cleaning up to the point where they're just like, hey, we want to buy another bank. Like, that's how good it is for some of these folks. Yeah.

Also, the world has changed in the past 10 years. We were in the Zerp environment. Capital was flowing freely. You didn't have as much hassle trying to get loans out. The regulators weren't putting the brakes on the economy like they are now. So past performance does not indicate future performance. So I just put a caveat on all that. But

I'm not so sold that owning a bank is a horrible thing. I think there's a lot of people making a lot of money doing it. I think they make money on the acquisition. You know, it's like a lot of, they don't make a lot of money in the short term while they're running the bank and putting it together and making it attractive to a suitor. But yes, when they get, when they, it's all this consolidation, people make money on that. Definitely selling to the bigger bank. Well, and I'm curious if like one of the challenges with all of this that we've talked about is the heavy regulations, but they are rolling regulations back.

um and under this administration so like maybe it'll get easier so maybe you know bob down the street should go buy the bank 43 million dollars it's gonna be great yeah well thanks for entertaining me guys i was so excited and you know what i'm gonna probably just dream about this and it's gonna be the one that got away for you know the rest of my life but you know what it might still be for sale in a year or two you know the fact it's listed online

And the fact that it's got a listing price online and that it's still been here for like nine months or it's from 2023, you said it's 18 months old. There is something fundamentally wrong with this whole situation. And I think somebody should go sign the NDA just to find out what is so wrong with it. That's how cool. That's why. But I think there's no deal to be had. If you will let me borrow your proof of funds, I will do it. Okay, Michael. Okay.

Can I use a PDF editor? Can we borrow Heather's? Yeah. I'm going to have to talk to Heather and Chelsea about that. I'm out. All right. Well, thanks everybody for tuning in. This was a fun episode. I hope you enjoyed it. If you've ever looked at a bank, we're dying to know more. Maybe you're a bank president and you want to partner with us on this deal. Yeah, we're dying to know more. Respond to us on Twitter and let us know what you think. See you all next time.