Financial Reporting Services
for Banks
The current financial reporting environment for banks is marked by a movement from historical cost to fair value accounting with an attendant increase in the complexity of accounting measurements
Recent Work
Portfolio Valuations
Valuations of equity (common and preferred), debt, and esoteric structured securities issued by banks and held by investment fund clients
Loans
Numerous valuations of loan portfolios with unpaid principal balances of less than $100 million to over $10 billion for financial reporting related to business combinations and periodic fair value disclosures
Goodwill
Determination of the fair value of reporting units for purposes of completing goodwill impairment tests
Deposits
Valuations of depositor customer relationship (core deposit) intangible assets, as well as mark-to-market adjustments for fixed term deposits
Other Liabilities
Valuations of bank borrowings, subordinated debt, and trust preferred securities for financial reporting related to business combinations and periodic fair value disclosures
Contingent Consideration
Valuation of earn-outs, loss-share agreements, and the like for purposes of estimating the total transaction consideration and recognizing other contingent assets and liabilities
What We Do
Services Overview
Mercer Capital’s professionals possess a knowledge of relevant accounting pronouncements and have expertise in valuation techniques appropriate for financial statement reporting.
For financial reporting compliance, Mercer Capital provides valuation services regarding:
Company securities issued in specific transactions
Customer relationships, including depository relationships (also referred to as core deposit intangible assets)
Non-competition and employment agreements
Preferred stock, trust preferred securities and other non-equity instruments
Other unique contractual or separable intangibles recorded under ASC 805 (formerly SFAS 141R)
Mark-to-market analysis of loan and deposit portfolios
Impairment tests regarding goodwill and other intangible assets
Equity or equity-linked instruments issued as compensation
Restricted stock
Service Focus
Loan Portfolio Valuation
Mercer Capital professionals have extensive experience in valuing illiquid assets including derivative securities, secured and unsecured debt instruments, and complex equity interests. Our loan portfolio valuation services help clients ascertain and develop support for fair values of portfolio investments in alternative assets. Our services include:
Derivative security valuation services
Secured and unsecured debt instrument valuation services
Illiquid equity interest valuation services
Convertible security, warrant, and option valuation services
Service Focus
Goodwill Impairment Testing
Mercer Capital provides goodwill impairment testing and intangible asset valuation services grounded in deep valuation expertise, financial reporting knowledge, and a thorough understanding of the financial services industry. We assist financial institutions nationwide with independent fair value opinions for reporting units under ASC 350, including Step 1 impairment testing.
When potential impairment is indicated, we perform the valuations required under Step 2, including financial assets, liabilities, and a wide range of intangible assets such as core deposit intangibles, customer relationships, trademarks, and employment agreements. We also value loan portfolios, time deposits, and other complex assets lacking observable market prices. Our professionals bring extensive experience with ASC 350 requirements and business combination accounting to help institutions navigate evolving impairment and reporting standards.
Key Contacts
Newsletter
Bank Watch Newsletter
Brought to you by the Financial Institutions Team of Mercer Capital, these monthly newsletters are focused on bank activity in five U.S. regions. Each edition of Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions in your region, providing insight into financial institution valuation issues.