Bank valuations continue to be driven by credit quality

BVWireIssue #101-1
February 2, 2011

If you liked the movie Talladega Nights: The Ballad of Ricky Bobby,you’ll appreciate Ken Segal’s (Howe Barnes Hoefer & Arnett) current report on the community bank market, Today’s AFS Market Overview.  Based on his analysis of SNL Financial data, Segal states that “for publicly traded banks less than $5 billion, valuations (and potential sale multiples) are highest for those banks with lower levels of non-performers relative to their peers. So while banks are rightfully concerned about GAAP book values of equity, they should also appreciate the positive impact to enterprise value by minimizing existing non-performers and originating fundamentally sound credits.”

Since we’re on the topic of banks, on February 17 expert appraiser Andrew Gibbs (Mercer Capital) and attorney Chip MacDonald (Jones Day) will share what every appraiser should know when appraising a bank today.  In “Valuing Banks,” their 100-mintue webinar, Gibbs and MacDonald will discuss the present, recent past, and near future with a critical eye towards what banking industry changes mean for the valuation process.  Click here for more information or to register.

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