While earnings multiples and other rules of thumb may drive transaction pricing, the final profitability of an M&A action often rests on the acquired core deposits. This is via the low cost and long term economic advantages and from the accounting treatments mandated by FAS 141.
MPS is the industry's premier expert in core deposit valuation and behavior. MPS services can help you pay the right price and meet FAS requirements by:
(1) Approximately valuing a transaction's core deposits from both the buyer's and seller's perspective prior to the deal.
(2) Precisely valuing FAS 141 core deposit intangibles (CDI) and CD/Loan premiums for purchase accounting treatments.
(3) Providing specialized valuations for unusual deposit types by using analog categories drawn from MPS client experience.
All MPS valuations employ FASB accepted methodologies and precisely match value characteristics to the specific transaction. Behavior estimates, for example average lives, rely on custom databases of recent MPS clients statistical analyses of core deposits.