Valuation and purchase accounting in a dynamic macroenvironment

The pandemic triggered a distinct change in monetary policy that has had profound effects on the financial services mergers and acquisitions (M&A) environment. Marks on acquired assets and liabilities are moving in parallel with the increases in interest rates. The Federal Reserve’s continued effort to rein in inflation has created additional uncertainty. Consequently, deal values are likely to continue showing very different results between the initial due diligence process and the completion of a transaction.

This whitepaper describes key trends we have observed in the valuation of loan portfolios, core deposits and the related intangible, time deposits, and debt instruments. Abrigo’s bank valuation services team also produces a quarterly analysis of exit price fair values for insight on recent trends.

In this whitepaper you will learn:

• The potential magnitude and direction of changing values
• How changes can impact the balance sheet
• Other valuation and purchase accounting implications