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The Bank Advisory Group Streamlines Bank Stock Valuations and M&A

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The Bank Advisory Group

For over 25 years, The Bank Advisory Group has advised community banks across the United States. In this case study and Q&A, Stephen Skaggs, President of The Bank Advisory Group, talks about key trends in the U.S. community banking market, and discusses how a Firmex Virtual Data Room subscription supports the firm’s bank stock valuation, brokerage, and merger and acquisition advisory services for community banks. A community bank is typically locally owned and operated and is not affiliated with a multibank holding company.

“Under the US Department of Labor’s Employee Retirement Income Security Act (ERISA), a community bank’s employee stock ownership plan (ESOP) has to have a valuation report prepared annually,” Skaggs explains. “If you’re a plan participant, and you want to retire, you need to know what your benefit is worth so you can liquidate it and roll it over into an IRA. Since the stock is closely-held, and not publicly traded like Bank of America or Wells Fargo, you have to have a qualified appraiser tell you what it’s worth.”

“Our staff includes Certified Valuation Analysts (CVAs) who are qualified to prepare and sign off on these annual valuation reports,” says Skaggs. “We have 50-60 bank clients who trust us every year to value their stock for their employee stock ownership plans. We rely on our Firmex Virtual Data Room to support our valuation business in addition to our M&A and bank brokerage services.”

“We like Firmex because it provides a secure solution for organizing and storing years’ worth of client data, and our clients find it very intuitive to use,” says Skaggs.

During diligence, sellers often feel under the gun. The last thing they need is a virtual data room that is frustrating to use or makes the process more onerous than it already is. The Firmex VDR interface is easy to navigate. It’s functionally friendly and most of our clients are able to start uploading and sharing documents immediately. Stephen Skaggs, President, The Bank Advisory Group

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