Bank Stock Valuations

Community Bank Stock Valuation Experts.

Make sure you’re making important decisions based on credible information.

When you work with the accredited BankValue advisors, UBB’s bank valuation division, you’re working with a team of experts who only work with community banks and understand all of the unique variables associated with owning a community bank and how they translate into the valuation process. Best of all, they stand by their findings and defend them if ever challenged, providing peace of mind knowing you’re receiving qualified and trusted information.

Reasons for receiving a bank stock valuation:

  • Depository institutions are required to receive independent assessments of value for several reasons, such as:
    • Administering an employee stock ownership plan (ESOP)
    • Developing buy-sell shareholder agreements
    • Repurchasing or reorganizing shareholders’ interests
    • Issuing new stock
    • Merging with or acquiring another bank

BankValue develops expert valuations that assist with the following:

Employee stock ownership plans (ESOP)
Under federal law, an employee stock ownership plan requires a valuation:
  • At formation
  • Annually, after its formation
  • Whenever conducting a “party of interest” transaction (i.e., a transaction with individuals or entities associated with the plan, causing a direct conflict of interest.)
Developing buy-sell shareholder agreements
Buy-sell shareholder agreements are legally binding agreements between the ownership parties of a bank. These agreements govern the transactions involving the bank’s stock if a co-owner dies or chooses to leave the bank. These agreements often call for an annual appraisal or can be triggered when the bank stock reaches a specific price determined by an independent appraiser.
Sub-chapter S conversions
Converting your bank’s ownership structure to an S corporation may give your shareholders favorable tax savings. If converting to an S corporation is a favorable strategy amongst your bank’s majority shareholders but has not yet been accepted amongst the minority shareholders, an independent third-party valuation might be all you need to convince them of the potential tax benefits..

Suppose a holding company attains 100% of the bank’s ownership. In that case, some tax advisors will recommend receiving a valuation to measure the built-in capital gains at the election if they decide to enact a reversal of the ownership structure in the future.
Charitable stock contributions
Your bank’s shareholders may face significant capital gains taxes if they sell their stock. To transfer shares and reduce their tax implications, shareholders may gift their shares in the bank to charity. This gifting process is done by instructing the holding company to redeem the shares at the fair market value determined by an independent appraiser.

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You’ve worked hard to build your bank into what it is today. Look to UBB’s independent bank stock valuation experts to ensure it is assessed correctly and you receive credit for its true market value.  Contact a BankValue advisor today.