On January 7, 2014 Tri-State Capital Holdings, Inc. (NASDAQ ticker: TSC), the holding company of Pittsburgh-based TriState Capital Bank, entered a definitive asset-purchase agreement to acquire Chartwell Investment Partners, L.P., a Registered Investment Advisor (RIA) in the Philadelphia area with approximately $7.5 billion in assets under management (AUM). Unlike most acquisitions of closely held RIAs, the terms of the deal were disclosed via a conference call and investor presentation; the details of which are outlined in this article.
Financial Institutions Articles
While many banks chafe under tightening regulatory policy directed by the Federal Reserve and other agencies, the Fed’s monetary policy has, however, created favorable conditions for equity investors. Likewise, the Fed’s monetary policy has compressed spreads on credit-sensitive assets and negated the return on holding liquidity. From bank management’s perspective, these conditions have led to continued deterioration in asset yields, pressure to extend loan portfolio durations, and few remaining alternatives to reduce funding costs. In sum, the Federal Reserve and other agencies have created conditions that complicate bank managers’ decision making – namely, greater regulatory burdens and the effects of a prolonged low interest rate period. However, the Fed’s monetary policy also has created conditions ripe for expansion of banks’ stock prices.
Merger related accounting issues for bank acquirers are often complex. In recent years, the credit mark on the acquired loan portfolio has often been cited as an impediment to M&A activity as this mark can be the most critical component that determines whether the pro-forma capital ratios are adequate. As economic conditions have improved in 2013, bank M&A activity has also picked up and we thought it would be useful to take a look at the estimated credit marks for some of the larger deals announced in 2013 (i.e., where the acquirer was publicly traded and the reported deal values were greater than $100 million) to see if any trends emerged.
Many bank analysts have been arguing that investors should buy bank stocks because capital is building faster than it can be deployed. The Federal Reserve, unlike during the pre-crisis era, is governing the amount of capital returned to shareholders. Basel III is another governor, especially given the enhanced leverage ratio requirement large U.S. banks are facing. But are buybacks a good idea for bank managers today?
The following provides an illustrative example of the primary steps to construct a “top-down” portfolio-level stress test.
In this article by Madeleine G. Davis, we examine the trends in loan growth for community banks in 2013.
Acquisitions of specialty finance companies by banks are not a panacea for challenges that face the industry; however, in some instances a transaction that is thoroughly vetted, well-structured, and attractively priced can provide the buyer a new growth channel while also obtaining revenue and earnings diversification.
Comments by Federal Reserve Board Chairman Ben Bernanke in the second quarter of 2013 resulted in significant increases in Treasury rates during the quarter, particularly for longer-term securities. In May, Bernanke testified before Congress and outlined the Fed’s eventual approach … Continued
While community banks may be insulated from certain more onerous stress testing and capital expectations placed upon larger financial institutions, recent regulatory guidance suggests that community banks should be developing and implementing some form of stress testing and/or scenario analyses.
This article summarizes Mr. Rodgin Cohen’s presentation at the 2012 AICPA Conference on Banks and Thrifts on the range of complex issues affecting the banking industry.
Recognition of the particular attributes of independent trust companies is significant to understanding their value.
For those banks considering the acquisition of a failed bank, changes to the terms of a number of FDIC-assisted transactions announced in the second quarter of 2010 should be considered prior to the preparation of bids.
The recently enacted “JOBS Act” attempts to reduce regulatory burdens on small businesses. However, these rules offer opportunities for community banks as well.
Despite an anticipated surge of transactions within the banking industry, bank merger and acquisition activity declined in 2011.
This article discusses three ways that a loan portfolio valuation analysis is helpful to your bank when considering an acquisition.
Bank stocks ended a particularly volatile month in August 2011 on a good note. Does this stock price volatility represent a “new normal,” as banks face more macroeconomic risk?
In this article, the Mercer Capital Financial Institutions group presents an updated analysis of community banks’ performance thus far in 2011.
Is this wave of predicted merger activity finally coming to fruition? This article reviews trends in M&A activity in 2010 and highlights trends to watch for bank transactions in 2011.
After completing an FDIC-assisted transaction, the acquirer faces the task of accounting for the transaction in accordance with FASB ASC 805, Business Combinations.
In order to gauge the impact of the 2008 financial institution market trends on community banks large and small.
While most banks and their directors are generally aware of the tax benefits of an S election, there are some potential disadvantages.
Excerpted from Mercer Capital’s book, The Bank Director’s Valuation Handbook: What Every Director Needs to Know About Valuation.
This article provides a summary of capital raising transactions that have occurred in 2008 and offers insight into the financial considerations present in evaluating each capital alternative.
The majority of respondents to a recent survey presented in the January 2008 edition of Mercer Capital’s Bank Watch are expecting a difficult, if not dismal, 2008.