Contenu connexe Similaire à How to Create Strategic Value in the Current Environment | AOBA 2017 (20) Plus de Mercer Capital (20) How to Create Strategic Value in the Current Environment | AOBA 20171. How to Create Strategic Value
in the Current Environment
Acquire or Be Acquired Conference
January 30, 2017 | Phoenix, Arizona
Andy Gibbs Chris Nichols
Jay Wilson CenterState Bank
MERCER CAPITAL
2. About the Presenters
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 2
Andrew K. Gibbs, CFA, CPA/ABV
Mercer Capital
Senior Vice President
gibbsa@mercercapital.com
901.322.9726
Jay D. Wilson, Jr., CFA, ASA, CBA
Mercer Capital
Vice President
wilsonj@mercercapital.com
901.322.9725
Chris Nichols
CenterState Bank
Chief Strategy Officer
cnichols@centerstatebank.com
925.202.8944
Chris Nichols is the Chief Strategy Officer for
CenterState Bank, a $5 billion, publicly traded
Florida bank. As Chief Strategy Officer, Chris
specializes in predictive analytics, marketing,
pricing, technology/innovation, risk management
and creating superior bank performance.
Chris has 25+ years of banking experience, is an
active bank investor, small business owner, banking
school instructor, a frequent speaker and author on
a multitude of banking topics including his new book
the Successful Lender’s Field Guide. In addition,
Chris is producer and host to a weekly podcast show
on iTunes called Bank To Bank.
Jay Wilson, Vice President, is a senior member of
Mercer Capital’s Depository Institutions practice. Jay
also leads Mercer Capital’s Financial Technology
industry team and publishes research related to the
FinTech industry. He is also the author of the upcoming
book, Creating Strategic Value through Financial
Technology (Wiley Finance Series, Summer 2017).
Jay’s practice involves in the valuation of depository
institutions and FinTech companies for purposes
including ESOPs, mergers and acquisitions, profit
sharing plans, estate and gift tax planning, compliance
matters, and corporate planning.
Andrew Gibbs leads Mercer Capital’s Depository
Institutions Group. Andy provides valuation and
corporate advisory services to financial institutions
for purposes including mergers and acquisitions,
employee stock ownership plans, profit sharing
plans, estate and gift tax planning and compliance
matters, corporate planning and reorganizations. He
also works with financial institutions in merger and
acquisition advisory engagements.
In addition, Andy is a frequent speaker on topics
related to community bank valuation and co-
authored several books.
3. Outline of Today’s Presentation
Community Banks Are Facing Challenging Market Conditions
Why Do Large Banks Outperform? Is There Any Hope?
How FinTech Can Help Create Strategic Value
How Banks Can Develop a FinTech Framework
Bank and FinTech Case Studies
Conclusion / Questions
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 3
5. Community Banks Are:
Not Earning Their Cost Of Capital…
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 5
Source: Mercer Capital Research and S&P Global Market Intelligence
6. Declining in Number…
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 6
-
2,000
4,000
6,000
8,000
10,000
12,000
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 9/16
# of Banks Overview of U.S. Banks
Assets >$10B Assets $1B-$10B Assets $100-$1BN Assets <$100MSource: QBPR, www.fdic.gov
7. Facing Elevated Regulatory Burdens…
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 7
Call Reports Are Significantly Longer
• < 10 Pages up until the mid-1980s
• Today > 80 pages
Sharp increase in both the number of new banking acts and the length of those acts in
each decade since the 1960s
• From 2001–2010, there were 10 new banking acts that became law and totaled
approximately 2,000 pages of new legislation
Hiring additional staff to handle this growing regulatory and compliance burden can have
a significant impact on bank profitability
• Feldman, Schmidt, and Heinecke (2013) at the Federal Reserve Bank of
Minneapolis found a reduction in profitability of 45 basis points for increasing
staff by two people for smallest banks (less then $50 million in assets)
Source: First Two Bullet Points http://mail1.dallasfed.org/assets/documents/banking/firm/fi/2015/fi1504.pd
Last Bullet Point “Quantifying the Costs of Additional Regulation on Community Banks,” by Ron J. Feldman, Jason Schmidt, and Ken Heinecke, Economic Policy Paper 13-3,
Federal Reserve Bank of Minneapolis, May 30, 2013.
8. Developing Greater
Concentration Risk…
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 8
Source: Mercer Capital Research and S&P Global Market Intelligence
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1995 2000 2005 2010 6/2016 YTD
%ofTotalLoans
Loan Portfolio Mix
Real Estate Loans Commercial / Industrial Loans Agricultural Production Loans Consumer Loans Leases / Other Loans
9. How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 9
Source: CB Insights
https://www.cbinsights.com/blog/disrupting-banking-fintech-startups/
Facing More
Competition from Non-Banks…
10. Losing Market Share
to Larger Banks, and…
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 10
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
% of Total Assets
Overview of U.S. Banks
Assets >$10B Assets $1B-$10B Assets $100-$1BN Assets <$100MSource: QBPR, www.fdic.gov
11. Less Profitable Than Larger Banks
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 11
Source: Mercer Capital Research and S&P Global Market Intelligence | Big Banks are Assets Greater than $5BN and Community Banks are $100M-$5BN
0.00%
0.15%
0.30%
0.45%
0.60%
0.75%
0.90%
1.05%
1.20%
1.35%
1.50%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
6/2016YTD
ReturnonAssets
Bank Profitability Trends
Return on Assets
Big Banks vs. Community Banks
Big Bank Median Small Bank Median
13. Community Banks Tend to Have Higher Net Interest Margins and…
Why Do Large Banks Outperform?
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 13
Source: Mercer Capital Research and S&P Global Market Intelligence | Big Banks are Assets Greater than $5BN and Community Banks are $100M-$5BN
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6/2016 YTD
NetInterestMargin
Net Interest Margin
Big Banks vs. Community Banks
Median - Big Bank Median - Comm Bank
14. Lower Provisions (i.e., Higher Credit Quality) Than Larger Banks
Why Do Large Banks Outperform?
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 14
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
3.25%
3.50%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6/2016 YTD
LoanLossProvision/AverageLoans
Trend in Loan Loss Provision
Median Big Banks Median Community Banks
Source: Mercer Capital Research and S&P Global Market Intelligence | Big Banks are Assets Greater than $5BN and Community Banks are $100M-$5BN
15. Why Do Large Banks Outperform?
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 15
Large Banks Outperform Small Banks Primarily Due to Greater
Non-interest Income and…
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6/2016 YTD
Non-InterestIncome/AverageAssets(%)
Trend in Non-Interest Income
(as % of average assets)
Big Banks vs. Community Banks
Non-Int't Inc. / Avg. Assets Big Bk Non-Int't Inc. / Avg. Assets Comm Bk
Source: Mercer Capital Research and S&P Global Market Intelligence | Big Banks are Assets Greater than $5BN and Community Banks are $100M-$5BN
16. Lower Efficiency Ratios Than Community Banks
Why Do Large Banks Outperform?
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 16
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6/2016 YTD
EfficiencyRatio(%)
Efficiency Ratio
Big Banks vs. Community Banks
Efficiency Ratio - Big Bks Efficiency Ratio Comm. Bks
Source: Mercer Capital Research and S&P Global Market Intelligence | Big Banks are Assets Greater than $5BN and Community Banks are $100M-$5BN
17. How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 17
Is There Any Hope?
18. How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 18
Many FinTech
companies are
focused on areas
where community
banks have
historically
underperformed:
efficiency and
non-interest
revenues…
What About FinTech?
Source: “The Future of Financial Services and Technology Explained,” BI Intelligence, April 7, 2016
http://www.businessinsider.com/fintech-ecosystem-financial-technology-explained-2016-3
20. How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 20
What is FinTech?
A number of definitions exist but consider the following:
• First applied to back-end software of established financial institutions
• More recently expanded to include any technological innovation in finance
• My definition is: Companies that use technology to provide financial services to customers either
directly or through partnerships with traditional financial institutions
How many FinTech companies are there?
Reports vary in a number of publications and it is growing daily
• Per McKinsey: 12,000 FinTech companies worldwide as of August 2015
• Per AngelList:
• 1,887 FinTech Startups with an average valuation of $4.8 million
• 2,469 Payments Startups with an average valuation of $4.1 million
• 1,525 Mobile Payments Startups with an average valuation of $4.5 million
21. Enhance Customer Satisfaction…
How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 21
FinTech equals the Great Equalizer
We cannot hope to compete with a mega-bank’s branch footprint,
but we can compete against their innovation
Some Reasons for Bank Innovation:
• Cut costs
• Increase Revenue
• Increase Engagement
• Lengthen lifetime value / retention
• Capture imagination / leadership
Source: Crossroads Banking & FinTech Conference, April 2016
Chris Nichols, CenterState Bank
22. How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 22
FinTech Investment vs. Branch Build – Traditional Strategy
Comparing FinTech Investment vs. Branch Build Decision
Branch Cost Online / Mobile Cost
To Build (2) $750,000 To Build (2) $650,000
To Maintain $949,000 To Maintain $324,000
To Serve 2,500 To Serve 23,000
Cost Per Customer $390/Yr Cost Per Customer $20/Yr
Engagement 24/Yr Engagement 122/Yr
(1) Online Mobile: Online banking, bill pay, geolocation, payments, alerts,
specialty apps
(2) Depreciation: 30 years for building / 5 years for online/mobile Source: Crossroads Banking & FinTech Conference, April 2016
Chris Nichols, CenterState Bank
23. How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 23
Lowering Expenses…
Source: Crossroads Banking & FinTech Conference, April 2016, Chris Nichols, CenterState Bank
24. How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 24
Improve Profitability… Trad'l Comm.
Bank
FinTech
Comm. Bank
Net Interest Income 36,000 36,000
Non-Int't Income 10,000 12,500
Non-Int't Operating Expenses (31,050) (30,313)
Pre-Tax, Pre-Provision Inc. 14,950 18,188
Provision Expenses (2,160) (2,160)
Pre-Tax Inc. 12,790 16,028
Taxes (4,477) (5,610)
Net Income $8,314 $10,418
ROAA 0.83% 1.04%
ROTE 9.24% 11.58%
Avg. Equity 90,000 90,000
Avg. Loans 720,000 720,000
Avg. Earning Assets 900,000 900,000
Avg. Assets 1,000,000 1,000,000
Net Int't Margin 4.00% 4.00%
Non-Int't Inc./Avg. Assets 1.00% 1.25%
Efficiency Ratio 67.50% 62.50%
Provision Exp. / Avg. Loans 0.30% 0.30%
25. How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 25
Valuation Multiple Expansion…
Banks with higher levels of non-interest income and efficiency are more
profitable and receive higher valuation multiples (Holding asset size
constant)
Price /
Price / Tangible
LTM Core Book Core
Public Banks (Assets between $500M-$1BN) EPS Value ROATCE
National Banks: Assets $500M - $1B 13.4x 1.02x 8.36%
High Non-Int't Income Banks: Assets $500M - $1BN* 14.2x 1.18x 9.47%
Low Efficiency Ratio Banks: Assets $500M - $1BN** 13.7x 1.19x 9.23%
Source: S&P Global Market Intelligence
Market Pricing Information as of 6.30.2016
* Non-Interest Income / Assets > 1% in LTM Period
** Efficiency Ratio < 60% in LTM Period
26. How FinTech Can
Help Create Strategic Value
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 26
Creating Strategic Value for Shareholders…
Implied Fin'l Performance Price to Earnings Multiple
Net Income ROAA ROTE 10.0 12.5 15.0 17.5
7,000 0.70% 7.78% 70,000 87,500 105,000 122,500
Trad'l Bk 8,000 0.80% 8.89% 80,000 100,000 120,000 140,000
9,000 0.90% 10.00% 90,000 112,500 135,000 157,500
FinTech Bk 10,000 1.00% 11.11% 100,000 125,000 150,000 175,000
11,000 1.10% 12.22% 110,000 137,500 165,000 192,500
28. FinTech Framework
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 28
1. Determine the FinTech niche to pursue further
2. Identify potential FinTech companies/partners
3. Develop a business case with estimated Internal Rates of
Return (IRRs)
• Examine Build, Partner (And Possibly Invest) Strategic
Decision
4. Execute strategy and compare IRRs from FinTech strategies
to traditional strategies
29. Step 1. Identify Attractive FinTech Niches
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 29
Key objectives from Bank’s strategic plan:
• Grow and diversify revenue base in less capital intensive
businesses, particularly non-interest income
• Customer surveys indicate an interest in providing more
financial and wealth management solutions
• Would like to create an additional touch point with customers
• However, historically haven’t been able to attract traditional
asset managers/RIAs to the bank due to cultural differences
• Bank would like to explore robo-advisory offerings
further
30. Step 1. Identify Attractive FinTech Niches
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 30
0%
4%
8%
12%
16%
20%
Bank Tech Robo-Advisory Insurance Tech Alt Lending Payments Trad'l Bank Deals
ExpectedReturn
31. How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 31
Key Takeaway’s From Robo-Advisory Industry Trends
• Lot of interest in sector with VC funding up from non-existent levels to hundreds of
millions annually in last few years
• Noted as the FinTech innovation most likely to have the greatest impact on the
financial services industry in the short-term (one year) and medium-term (five
years) by CFA Institute
Key Advantages Over Traditional Wealth Management Services Include:
• Low Cost
• Accessible
• Personalized Strategies
• Transparent
• Convenient
Step 1. Identify Attractive FinTech Niches
32. How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 32
Robo-advisors are separated into
three tiers
1. Tier I consists of early robo-advisory
firms who have positioned
themselves at the top of the industry.
2. Tier II consists of more recent robo-
advisory startups that are
experiencing rapid growth and are
ripe for partnership.
3. Tier III consists of robo-advisory
services of traditional players who
have decided to build and run their
own technology in-house
Step 2. Identify Attractive
FinTech Companies
33. Step 3. Develop a Business Case
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 33
Once the FinTech niche and target companies are identified, there
are a number of strategic options to consider
Each has varying degrees of commitment
Key question is often: Should we build, buy, or partner (and
possibly make an investment)?
One way to answer that question is to look at potential
returns from each strategy and compare
34. IRR Comparisons of Different Approaches
Step 3. Develop a Business Case
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 34
FinTech Partnership
(Licensing)
Initial Year 1 Year 2 Year 3 Year 4 Year 5
Cost Outlay (100,000) (275,000) (275,000) (275,000) (275,000) (275,000)
Revenue Enhancement 300,000 306,000 312,120 318,362 324,730
Total Cash Flows (100,000) 25,000 31,000 37,120 43,362 49,730
Internal Rate of Return 22%
FinTech Partnership +
Minority Invt't.
Initial Year 1 Year 2 Year 3 Year 4 Year 5
Cost Outlay (100,000) (250,000) (250,000) (250,000) (250,000) (250,000)
Equity Investment (1,000,000)
IPO / Sale Proceeds 4,000,000
Revenue Enhancement 300,000 300,000 300,000 300,000 300,000
Total Cash Flows (1,100,000) 50,000 50,000 50,000 50,000 4,050,000
Internal Rate of Return 32%
FinTech (Full Acquisition)
Internal Rate of Return (Full Acquisition) Closing Year 1 Year 2 Year 3 Year 4 Year 5
Deal Consideration (25,000,000)
Closing Costs (2,000,000)
Opportunity Cost of Cash (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000)
Cash Flows Generated from Target 0 1,000,000 2,000,000 3,000,000 4,000,000
Terminal Value 60,000,000
Total Cash Flows (27,000,000) (1,000,000) 0 1,000,000 2,000,000 63,000,000
Internal Rate of Return 19%
35. Step 3. Develop a Business Case
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 35
IRR Comparisons of Different Approaches
0%
5%
10%
15%
20%
25%
30%
35%
40%
Partner Only - No Invt't. Partner + Minority Eqty. Invt't. AcquisiBon
ExpectedReturn
FinTech Analysis
Partner vs. Investor vs. Acquirer
36. Step 4. Execute Strategy and Compare
FinTech vs. Traditional Strategies
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 36
0
2
4
6
8
10
12
14
16
18
20
ExpectedReturn(%)
FinTech
Build? Partner?
Buy?
Ignore?
TradiConal
Bank Growth
37. Some Common Challenges with FinTech for Banks Include:
FinTech Can Be Challenging Though
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 37
Vast array of start-ups to consider
FinTech acquisitions/investments can be difficult to consider and structure
• Valuations of FinTech companies can be challenging and significantly
different from traditional bank valuations
• FinTech acquisitions can result in goodwill creation
Is the bank comfortable with the risk profile of the FinTech company?
What will the regulatory reaction be?
Is the partnership consistent with the bank’s long-term plan?
39. How Are Banks Approaching FinTech?
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 39
Source: “The Future of Financial Services and Technology Explained,” by BI Intelligence, April 7, 2016,
http://www.businessinsider.com/fintech-ecosystem-financial-technology-explained-2016-3
40. How Are Banks Approaching FinTech?
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 40
Source: Crossroads Banking & FinTech Conference, April 2016
Chris Nichols, CenterState Bank
41. FinTech Case Studies –
Build Strategy
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 41
Some traditional financial services companies have elected
to build their own robo-advisory offering
Examples of those who elected to build or are in the
process of building their own robo-advisory platform
include: Schwab, Vanguard, Morgan Stanley,
TD Ameritrade and Fidelity
42. FinTech Case Studies –
Partnership Strategy
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 42
Community Bank Robo-Advisory Partnerships
• Partnership between Cambridge Savings Bank, a $3.5 billion bank located near
Boston, and SigFig, a robo-advisor founded in 2007
• Built a service called “ConnectInvest“, which is available to Cambridge’s customers
digitally (mobile and website), and “allows customers to easily open, fund, and manage an
automated investment account tailored to their goals.”
• Personal Capital, a robo-advisor started in 2009, announced a partnership with
AlliancePartners to offer its digital wealth management platform to approximately
200 community banks
• Other Robo-Advisory partnership examples involving larger financial services
companies include:
• UBS/SigFig, Wells Fargo, Future Advisor / RBC, BBVA Compass, LPL, Motif / JP Morgan
43. Ally Financial, Inc. (ALLY) & TradeKing
FinTech Case Studies –
Acquisition Strategy
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 43
ALLY acquired TradeKing, a discount online brokerage firm (~$5 equity trades) for $275 million in cash
• Deal announced in April 2017 and completed in June 2017
TradeKing also had a robo-advisory platform that appeared to be a key piece of the puzzle
Strategic rationale reflect creative thinking on the part of Ally executives and/or its investment
bankers
• FinTech acquisition that is focused on revenue synergies as TradeKing enhances wealth
management offering to their existing bank customers
• Versus traditional bank acquisition strategy that often focuses on expense savings
“Banking and brokerage should be together so you can save and invest—and easily move money between
the two.” – Don Montanaro TradeKing, CEO
“We have a good composition of customers across all demographic segments, from affluent boomers to
millennials… Our customers have been happy with our deposit products, but are asking for more from the
online bank.” – Diane Morais Ally Bank, CEO
Other Robo-Advisory Acquisitions by Traditional Financial Services Companies Include:
• Invesco/Jemstep, Goldman/Honest Dollar, Blackrock/Future Advisor
44. FinTech Case Studies –
CSFL Projects
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 44
• International services
• Invoicing / AR Management
• Fixed asset management
• Alert functionality
• Budget management
• Prepaid cards
• Lock Box
• Risk management
• Loan structuring
Striving for a goal of 40% plus from fee (i.e., non-interest) revenue
Source: Crossroads Banking & FinTech Conference, April 2016
Chris Nichols, CenterState Bank
45. FinTech Case Studies –
CSFL Branch Innovation
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 45
Universal banker model
More automated tellers - IVTs
Cash recycling – branch + at the
customer
Smaller, open footprint
Video conferencing
Positioned for less transaction more
sales/consultative focused
Source: Crossroads Banking & FinTech Conference, April 2016 Chris Nichols, CenterState Bank
46. About Mercer Capital
Mercer Capital is a national business valuation and financial advisory firm. Financial
institutions are the cornerstone of Mercer Capital’s practice.
Founded in 1982, in the midst of and in response to a previous crisis affecting the financial services
industry, Mercer Capital has served clients through a variety of market environments. Today, as in 1982,
Mercer Capital’s largest industry concentration is financial institutions.
Despite industry cycles, Mercer Capital’s approach has remained the same – understanding key factors
driving the industry, identifying the impact of industry trends on our clients, and delivering a reasoned and
supported analysis in light of industry and client specific trends. The Financial Institutions Group of Mercer
Capital provides a broad range of specialized advisory services to the financial services industry.
The Financial Institutions Group broadly assists:
• Depository institutions • Private equity, hedge funds, trust companies, and
TrustCos / RIAs
• FinTech companies • Specialty finance and real estate investment companies
• Insurance companies
• Investment funds
For more information please visit www.MercerCapital.com
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 46
47. Mercer Capital’s Core Services
for Financial Institutions
Advisory Services
• Strategic consulting
• Buy-side and sell-side financial advisory services
• Fairness opinions
• Advisory and consultation regarding capital transactions (raising, deploying, and restructuring capital)
Corporate Valuation Services
• Equity transactions (share repurchases, issuances, and conversions)
• Corporate transactions (recapitalizations, divestitures, reorganizations, and the like)
• Employee benefit plans (ESOPs, KSOPs, stock option plans, and restricted stock)
• Tax compliance (income, estate, and gift)
• Buy/sell agreement consulting and the valuation of securities with contractual restrictions on transfer
• Valuation of complex securities (convertibles, options, warrants, and the like)
• Valuation of securities with impaired marketability
• Litigation support
Financial Reporting Services
• Purchase price allocations (ASC 805)
• Stock-based compensation (ASC 718)
• Goodwill impairment (ASC 350)
• Illiquid financial instruments (ASC 820)
• Portfolio investments held by business development companies, private equity firms, and other financial intermediaries
47How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital
48. About CenterState Bank
CenterState Banks, Inc., headquartered in Winter Haven, Florida, is a financial holding company with one
nationally chartered bank: CenterState Bank of Florida. The Company, formed in June 2000, operates through
74 branches in 22 counties throughout Florida, providing traditional deposit and lending products and
services to its commercial and retail customers.
Since 2009, the Company has utilized its strong capital levels and financial stability, positioning the Bank to be
opportunistic within the fluid banking environment. Acquisitions and new business lines have helped the Company
grow to approximately $6.5 billion in assets. Activity during this time includes:
FDIC Acquisitions Non-FDIC Acquisitions
Ocala National Bank TD Bank Branches in Putnam County, Florida
Olde Cypress Community Bank Federal Trust Acquisition from The Hartford
Insurance Company
Independent National Bank Gulfstream Business Bank
Community National Bank of Bartow 1st Southern Bank
Central Florida State Bank Community Bank of Florida
First Guaranty Bank and Trust Company of Jacksonville 1st National Bank of South Florida
Platinum Bank (Pending)
Business Lines Gateway Bank (Pending)
Correspondent Banking Division
Prepaid Card Division
Wealth Management Division
For more information please visit www.CenterStateBanks.com
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 48
49. New Book Coming in Spring 2017
Creating Strategic Value Through
Financial Technology
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 49
While many bankers view FinTech as a potential threat, FinTech offers the potential to
improve the health of community banks for those banks that can selectively leverage
FinTech to enhance performance, customer satisfaction, and improve profitability and
returns. FinTech can also help level the playing field for community banks to compete
more effectively with larger banks and
non-bank lenders.
Creating Strategic Value Through Financial Technology illustrates the potential benefits
of FinTech to banks, both large and small, so that they can gain a better understanding of
FinTech and how it can create value for their shareholders and enhance the health and
profitability of their institutions.
The book contains 13 chapters broken into three sections. Section I introduces FinTech.
Section II explores FinTech niches such as bank technology, alternative lending, payments,
wealth management, and insurance niches. Section III illustrates how both community
banks and FinTech companies can create strategic value.
Visit http://mer.cr/FinTechBook for more information.
50. Contact
How to Create Strategic Value in the Current Environment // © 2017 Mercer Capital 50
Andrew K. Gibbs, CFA, CPA/ABV
Mercer Capital
Senior Vice President
gibbsa@mercercapital.com
901.322.9726
Jay D. Wilson, Jr., CFA, ASA, CBA
Mercer Capital
Vice President
wilsonj@mercercapital.com
901.322.9725
Chris Nichols
CenterState Bank
Chief Strategy Officer
cnichols@centerstatebank.com
925.202.8944