Financial Institutions: Black Holes of Valuation

Originally presented at the ASA’s 2017 Advanced Business Valuation Conference.

In his session, Jeff reviewed the business model for banks and other financial institutions and how the model differs from that of non-financial institutions. He reviewed various valuation methodologies for financial institutions and what pitfalls valuation professionals may grapple with vis-a-vis non-financial institutions. Overlaid will be a perspective on factors that matter for stock selection and why these factors can differ somewhat from valuation factors. Further, Jeff reviewed issues related to valuing securities issued by financial institutions that are in the capital stack above common equity.