9 Class Hours

Instructors: Wesley Brown & Adam Fiedor

This course provides the skills necessary to assist in analyzing key questions of bank strategy around mergers and acquisitions and bank capital to determine whether a proposed acquisition would likely add to the value of the franchise or reduce it. The student will begin by learning techniques to value banks and gain a greater understanding of the valuation metrics. We will next explore what makes banks more or less valuable, especially in light of the current M&A and capital markets. The course will focus on various attributes that impact the enterprise’s worth. For example, how does a bank’s location impact its value? Factors like population density, growth, household income, branch size and configuration, deposit make-up, and other issues are critical for understanding how to shape a valuable franchise. The merger and acquisition process will be explained. Students will learn how to examine a bank acquisition from the buyer’s perspective as well as how to manage a sale process. Finally, bank capital will be studied to provide an understanding of the various capital instruments available to a bank, what are their costs in yield and dilution, and what are the practical methods of issuance. Students will get to work in teams on several case studies to hone their skills.

Annual School Session

Third Year, First Week Elective Course

Financial Management Track