While last year not one bank expressed interest in going public in the next 3 years, this year 12% of and 14% of banks that have mutual charters (mutuals) said they were “very” or “somewhat” likely to take their bank public in the next three years, according to Grant Thornton’s 14th Annual Survey of Bank Executives.



“Non-public banks of all asset size are equally likely to report that they are likely to take their bank public in the next three years,” said John Ziegelbauer, managing partner of Grant Thornton’s financial institutions practice. “However, banks with assets in excess of $500 million are more likely to indicate that they are “very likely” (7%), while only 2% of the banks with less than $500 million in assets reported that they were “very likely” to go public.”

Another finding from the survey is that more than eight in 10 bankers (84%) agree with the statement that “Sarbanes-Oxley should be right sized to more appropriately apply to smaller companies”. It is not surprising that more than nine out of ten (92%) of public banks, which actually have to comply with SOX, agree with this statement. However, almost eight out of 10 mutuals (78%) and more than eight out of ten private banks (82%) also agree.

“This renewed interest in public ownership for banks may be related to the regulatory agencies’ discussions regarding right sizing of Sarbanes-Oxley requirements,” concluded Ziegelbauer. “It’s possible they foresee changes happening sooner rather than later.”

About the survey

Grant Thornton’s Annual Survey of Bank Executives is the oldest continuous independent study of its kind in the banking industry. In October 2006, Grant Thornton mailed questionnaires to a national sample of 4,709 chief executive officers and senior officers of banks and savings institutions with assets in excess of $100 million. A total of 355 completed questionnaires were returned for a response rate of 7.9 percent, yielding a margin of error of ± 5.2 percent.

More than two-thirds (67%) of the respondents report assets of less than $500 million, with 33 percent reporting assets greater than $500 million. The executives defined the community they primarily serve as suburban (40%), rural (33%) and/or urban (25%). Almost one-third (29%) are publicly held, 53 percent are private corporations, and 16 percent have mutual charters.