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Financial Institutions: Second Quarter 2013

Deloitte Corporate Finance LLC


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This quarter’s Financial Institutions Update, produced by Deloitte Corporate Finance LLC (DCF), summarizes recent transactions within this industry along with information on active buyers, current transaction valuation multiples and an overview of the public market’s perception of the industry.

Highlights include:

  • Transaction premiums to share prices have declined as banks stocks continued to outperform the broader market.1
  • The spike in long-term interest rates has resulted in declining fee income from mortgage refinancing, however the increased volume in home purchases has helped to mitigate the negative effect on revenue.2
  • Smaller banks are experiencing some relief with the new Basel III rules given that RWA calculations for mortgage loans were largely unchanged; a new opt-out provision is available regarding AOCI, and the grandfathering of  TRUPS survived.3

Sources:
1 – SNL Financial
2 – National Association of Realtors Article Titled “June Existing-Home Sales Slip but Prices Continue to Roll at Double-Digit Rates”
3 – SNL Financial Article Titled “Final Basel III rule grants smaller banks some breathing room” By Lindsey White

 

To read more, download the Financial Institutions Update.

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