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Bank Valuation Considerations

Bank Valuation Considerations

In our most recent newsletter, The Future of Bank Consolidation - What it means for the Midwest Market, we discussed the number of individual bank charters in the Midwest compared to the charter number of other states. That newsletter generated a lot of feedback and discussion so we thought that we would expand further on how we see it impacting valuation. 

As stated in our last newsletter because the Midwest accounts for approximately half of the charters in the United States, we believe about half of all of the consolidation will occur in the Midwest states. This consolidation will have a noticeable impact on community banking in our region. 

We also believe consolidation has, and will continue to have, a direct impact on bank values. We believe this has the potential of leaving some banks with limited value while leaving a few others with an increased valuation because of size, scale and scarcity. 

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