Mergers & Acquisitions
Preliminary and Final Merger Valuation
Wilary Winn is one of the leading providers of fair value advice to the financial institution industry. We have performed over 600 merger & acquisition (M & A) valuation engagements since January 2009. We have provided advice on transactions of all sizes, including organizations as small as $2M and as large as over $3B in total assets.
Why Choose Us
Recognizing the amount of effort required to successfully complete a merger or acquisition, we make the accounting as simple as we can. Our involvement in so many M & A transactions makes us fully aware that, as complex as the accounting for a transaction can be, it is not the most difficult challenge financial institutions face as they combine. Ensuring cultural fit, retaining customers/members and employees, and converting data processing systems as part of the merger process are all very complex undertakings.
We provide a turnkey solution, including the day one journal entries and a spreadsheet detailing the ongoing journal entries to be recorded for amortization or accretion of the transaction-related premiums and discounts. Through our valuation process, we also provide estimates of the effect the transaction will have on the combined organization’s balance sheet profile – including credit risk and capital implications.
Wilary Winn wants a financial institution to be fully aware of the merger accounting implications before it undertakes a transaction and has drafted white papers on mergers and acquisitions – one for credit union transactions and another for banks. We also offer preliminary valuation services.
We are nationally recognized experts in accounting and regulatory reporting for mergers and acquisitions and have led seminars on the subject for the AICPA, America’s Credit Unions, the FDIC, FFIEC, NCUA, and many of the nation’s largest accounting firms.
Our Approach
Purchase accounting requires that the acquired institution’s balance sheet be recorded at fair value. We estimate the fair value of the liabilities assumed, including the core deposit intangible arising from non-maturity deposit/shares, the fair value of the loans and investments acquired, the fair value of the equity acquired, and the amount of goodwill or bargain purchase gain.
We offer a preliminary valuation designed to help a financial institution better understand the accounting, combined balance sheet risk, and regulatory capital implications of a contemplated merger. Clients typically engage us for this service if they have not done a merger under the purchase accounting rules or if they are unsure if they want to effect the transaction. The valuation is also often used to support the application seeking regulatory approval.
Wilary Winn performs our final valuation as of the legal merger date. It is used to record the day one journal entries and provides the basis for the ongoing accounting. For additional details, see our white papers on Purchase Accounting for Credit Unions and Accounting for Bank Acquisitions.
We also perform post-merger work, including goodwill impairment testing.