Valuation Services for Banks
Mercer Capital pairs analytical rigor with industry knowledge to deliver unique insight into issues facing banks
Recent Work
U.S. Banks
Numerous valuations for transactions with tax compliance implications, such as income, gift, and estate tax
U.S. Banks
Valuations for purposes of shares issuances and redemptions, including both voluntary and involuntary transactions
U.S. Banks
Valuations of loan portfolios and other financial instruments for transactions triggering tax reporting obligations
European Banks
Valuation services for an investment fund regarding several banks operating in a European country
U.S. Banks
Numerous valuation opinions rendered regarding shares held by employee benefit plans—such as employee stock ownership plans—and for other compensatory arrangements such as restricted stock or stock option plans
FinTech Subsidiaries
Valuation analyses of FinTech subsidiaries of U.S. banks for transactional purposes and internal reorganizations
Specialty Lending
Valuations of companies in the leasing, residential mortgage lending, and commercial lending niches for transactional purposes
What We Do
Services Overview
Mercer Capital combines analytical rigor with deep industry knowledge to provide clear, independent insight into the issues facing banks. These insights form the foundation of the valuation analyses that are central to Mercer Capital’s services to depository institutions.
We serve banks nationwide, with clients ranging from community banks with less than $50 million in assets to the largest U.S. depositories. Our experience spans institutions that are rural and metropolitan, closely held and widely owned, financially challenged and highly successful, and from simple to complex capital structures. Since our founding, we have rendered thousands of valuation opinions for depository institutions.
Mercer Capital provides comprehensive valuation and advisory services to banks, including:
Stock Valuations
Core Deposit Intangible Valuations
Loan Portfolio Valuations
Fairness Opinions
ESOP Appraisals
Financial Reporting Valuations
Service Focus
Valuations for Tax Compliance
Valuations are a critical element of successful tax planning strategies. Objective third party valuation opinions are vital.
Mercer Capital’s opinions of value for tax compliance purposes are well-reasoned and well-documented, providing critical support for any potential challenge. The overwhelming majority of the time, our work has resulted in quiet acceptance by the IRS, as well as state and local taxing authorities.
In the tax compliance arena, Mercer Capital provides valuation services for the following purposes:
Family wealth planning
Gift and estate tax compliance
Corporate tax planning, such as reorganizations or recapitalizations
Individual and corporate tax compliance
Mercer Capital’s experience includes valuing the following types of securities for tax compliance purposes:
Shares of closely held companies
Shares encumbered by specific restrictions under the securities law or block size issues
Interests in family limited partnerships and limited liability companies
Preferred stock, trust preferred securities, and other non-equity instruments
Stock options and other equity-linked instruments
Covenants and agreements not to compete
Other intangible assets
The Valuation Process for a Bank
Every project is different, but most progress from information gathering to research, analysis, and reporting.
When you call us, we discuss (1) the subject bank, (2) the situation giving rise to the needed valuation, and (3) any specific client needs. During our discussions, we determine the scope of services your project will require.
An engagement letter, which includes a project overview and sets forth the fee arrangement, is then provided. Also included is a preliminary information request.
Initial research: A preliminary analysis of the bank is conducted and industry data as well as any information you provide is reviewed.
Leadership interview: Mercer Capital will visit with appropriate members of management to review the bank’s background, financial position, and outlook and respond to questions from management.
Analysis and report preparation: Following the leadership interview, the valuation analysis is completed and a valuation report to explain and support our analysis is prepared.
A draft report for client review is provided. Client review of the draft report is an important element in the process. We discuss the draft report with the client to assure factual correctness and to clarify questions about the report.
After the final review, the final valuation report is issued, and any necessary follow-up consultation begins.
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.