What to Consider When Acquiring a Failed Bank

OAK BROOK, Ill., Aug. 11 /PRNewswire/ -- According to the Federal Deposit Insurance Corporation (FDIC), during the first seven months of the year 108 U.S. banks and thrifts had already failed. If this trend continues, the total number of failures this year will exceed the 140 that occurred in 2009. For healthy financial institutions, investor groups and private equity sponsors that might be interested in acquiring a failed bank, Crowe Horwath LLP has released, "Navigating the Maze of Acquiring a Failed Bank," a series of articles to help an acquirer weigh the potential risks and benefits before proceeding with the transaction.  

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Crowe Horwath, one of the largest public accounting and consulting firms in the U.S., audits more banks than any other U.S. accounting firm, giving it particular insight into the industry.

"Most acquisitions involve a loss-sharing agreement, in which the FDIC agrees to absorb a significant portion of the loan losses, typically 80 percent," explained Rick Childs, a director in Crowe's financial advisory services group. "So, even with the inherent risk in a failing bank's loan portfolio, an FDIC-assisted acquisition can be very attractive to a healthy institution. It can offer strategic growth opportunities, including branch expansion, deposit growth and income increases."

From evaluating bid considerations through final integration, the acquisition process for FDIC-assisted transactions has its own protocol. The following Crowe articles offer more details on the steps involved:

• Evaluating a failing bank: Key factors to consider
• Due diligence for acquiring a failing bank
• Accounting issues after a failed-bank acquisition
• Income tax considerations for acquiring a failed bank
• Valuing a failed-bank acquisition
• Post-acquisition integration of failed banks: "Speed to value" is crucial to success
• The role of private equity in acquiring failed banks

To download the articles, please visit www.crowehorwath.com/acquiringfailedbanks.

About Crowe Horwath

Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of "Building Value with Values®," Crowe assists public and private company clients in reaching their goals through audit, tax, advisory, risk and performance services. With 26 offices and 2,400 personnel, Crowe is recognized by many organizations as one of the country's best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest networks in the world, consisting of more than 140 independent accounting and management consulting firms with offices in more than 400 cities around the world.

SOURCE Crowe Horwath LLP