Banking Industry

Providing valuation services for financial institutions requires not only a sound understanding of modern finance, but specialized knowledge of the markets in which these institutions operate.  The methods, assumptions, and judgments used in valuing financial institution assets (such as loans) and liabilities (such as core deposits) must reflect market realities.  Valuation conclusions must be supported by solid empirical evidence.  We are in the unique position to provide this expertise.

Our professionals have been pioneers in developing methods for valuing financial institution assets and liabilities (such as core deposits, credit card portfolios and performing and non-performing loan portfolios) and for properly measuring a financial institution's interest rate risk (using advanced financial measures such as duration and convexity).  They have written numerous articles and taught courses in the areas of bank valuation and asset/liability management.

We provide assistance in the following areas:

• Valuation of bank stock and the stocks of other financial companies
  
• Valuation of individual assets or liabilities including:
  -  Commercial loans
  -  Consumer loans (mortgages, installment, etc.)
  -  Marketable and non-marketable securities
  -  Credit card portfolios
  -  Trust operations
  -  Core deposits
  
• Mergers and acquisition analyses, including fairness opinions and assistance in pricing
  
• Rate sensitivity analyses (measuring how a financial institution's specific interest rates - for both assets and liabilities -  react to changes in market rates)
  
• Asset/liability management using duration and convexity (includes review and development of models, assumptions, and results)

We use primarily the market and income approaches to value bank assets and liabilities; the cost approach is not appropriate in most cases.  We usually place more emphasis on the income approach since good market comparables for a financial institution's various classes of assets and liabilities are not generally available.