Professional Documents
Culture Documents
Capital Markets
& Bank Valuation Update
ICBA Community Bank Day
May 20, 2014
Presented by: Thomas R. Mecredy
Over $1
Billion
ROAA (1)
0.73%
0.91%
ROAE (1)
6.70%
8.50%
3.31%
3.47%
Efficiency Ratio
71.57%
65.10%
Net Charge-Offs
0.13%
0.21%
Nonperforming Assets/Total
Assets
1.25%
1.33%
0.08%
0.11%
10.20%
9.75%
3.3%
6.3%
Deposit
Rate
Median forGrowth
all commercial
& savings banks
1.1%
2.9%
3.50
25.0
3.00
2.50
20.0
2.00
15.0
1.50
10.0
1.00
5.0
0.50
0.0
0.00
Median Price/Earnings
2003
2.02
2.05
23.5
13.7
2004
2.03
2.13
23.3
15.5
2005
2.06
2.18
22.8
17.0
2006
2.15
2.27
23.1
18.6
Median Price/Book
2007
2.04
2.18
22.8
15.6
2008
1.58
1.62
23.4
9.4
2009
1.14
1.15
18.3
1.7
2010
1.16
1.22
22.2
3.0
2011
1.02
1.05
25.2
0.3
2012
1.12
1.16
18.8
2.4
2013
1.18
1.25
19.1
3.3
40
36
35
15
< 100%
100-125%
125-150%
150-175%
175-200%
> 200%
539
$500M-$1B
641
$100M-$500M
< $100M
7
3,185
2,056
160
100
0
-64
-100
-200
-300
-400
-500
-600
-700
-800
-810
-900
Employment contracts
Stock options
Executive salary continuation agreements (SERP)
BOLI
Director retirement agreements (DRP)
Key employees (pay to stay, severance pay, change-ofcontrol payments)
280G tax issues
Data processing break-up fees
Problem loan sales
Professional fees
Merger run-off / employee pirating
Mark to market issues (FAS 141R)
12
8.1
7.9
7.4
4.2
5.00
1.3
0.00
9.7
(0.7)
2004
2.3
0.3
2005
2006
1.5
2007
0.7
2008
(3.8)
(5.00)
2009
(2.0)
2010
2011
(4.3)
(6.0)
(6.9)
(8.8)
(10.00)
(11.7)
(15.00)
2012
(6.9)
2013
(5.7)
Seller Dynamics
Liquidity needs
Slower growth / declining earnings
Management / staffing
Regulatory burden
Economic indicators
15
Strategic Mergers-Typical
Characteristics
2,603
52
% of Total
2.0%
29
% of Total
1.1%
21
Strategic Mergers
Advantages
Disadvantages
May fail to create business line and product scope
Requires compromise on business and social
issues, including:
Business model
CEO / CEO responsibilities
Chairman / Chairman responsibilities
Responsibilities of CFO and other senior
management
Board composition / representation
Headquarters location
Name of holding company
Name of bank subsidiaries
Sharing of cost savings
Where to cut the pie
No or low premiums can discourage shareholders,
especially if banks were acquirable
One party ultimately loses voting control for
no / less premium
22
Number of Transactions
105
86
71
80
78
83
89
78
65
60
40
20
0
2005
2006
2007
2008
79
2009
2010
2011
2012
2013
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Franchise Premium
7.3%
7.0%
7.8%
5.0%
3.4%
2005
2006
2007
2008
3.3%
2009
2010
2.8%
2011
$20.7
$10.0
$5.0
$12.7
$12.2
$8.7
$7.3
$3.0
$2.9
2007
2008
Midwest-29; 40%
$0.0
2005
2006
$5.5
$3.3
2009
2010
2011
2012
2013
2.4%
2012
2013
$20.0
$15.0
2.2%
300%
20.0
250% 239%
200%
16.716.7
15.0
180%
155%
150%
100%
13.8
14.8
13.9
15.5
14.1
120%
131%
108%
14.1
75%
74%
67%
13.6
13.2
12.6
12.1
12.0
121%
92%
88%
15.9
15.4
155%
146%
125%
16.0
76%
10.0
50%
0%
2006
2007
2008
2009
> $1 Bill
2010
2011
2012
< $1 Bill
2013
5.0
2006
2007
2008
2009
> $1 Bill
25
2010
2011
< $1 Bill
2012
2013
Conclusion
Thank You
Intended for institutional investors only. Although the information
included in this report has been obtained from sources we believe to
be reliable, we do not guarantee its accuracy. All opinions expressed
in this report constitute the judgments as of the dates indicated and
are subject to change without notice. This report is for informative
purposes only and is not intended as an offer or solicitation with
respect to the purchase or sale of any product. The accuracy of the
financial projections is dependent on the occurrence of future events
which cannot be assured; therefore, the actual results achieved
during the projection period may vary from the projections. Member
FINRA/SIPC.
Thomas R. Mecredy
Vining Sparks Community Bank Advisory Group
tmecredy@viningsparks.com
512-495-9890
27