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S Corp Workshop

S Corp Workshop

May 2, 2018

Authored by: Bryan Cave Leighton Paisner

On Monday, May 14, 2018, we will be hosting, with our friends at Porter Keadle Moore, LLC and FIG Partners, an S Corp Workshop exploring issues affecting S Corp banks following adoption of the Jobs and Tax Cuts Act.

Operating as an S Corp has historically been an appealing choice for many financial institutions that have the flexibility to be taxed in a variety of ways. In light of the recent tax reform, however, an S Corp structure may not be as beneficial as it has traditionally been in the past. Whether you’re an existing S Corp considering converting, or just want to learn more about key decision points, join us as we take a deeper dive into the mechanics and calculations as well as discuss case studies on how using this election can help you thrive in today’s dynamic business environment.

Monday, May 14
7:30 am – 5:30 pm
Office of Bryan Cave Leighton Paisner
One Atlantic Center, 14th Floor
1201 W. Peachtree St., N.W.
Atlanta, GA 30309

Click here for Agenda.

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A Recap of the AOBA M&A Simulation with FIG Partners

On the second day of Bank Director’s Acquire or Be Acquired (AOBA) Conference, we were honored to co-host with FIG Partners for the second year, the M&A Simulation.  The M&A Simulation is an exclusive, bankers-only, session at AOBA that attempts to walk through the initial stages of a bank merger.  Like last year, we divided the attending bankers into three groups, representing the boards of directors of three distinct participants: Bank A, a $700 million bank looking to sell, and Banks B & C, two larger potential acquirers.

the-bank-account

Immediately after the simulation, we sat down with Matt Veneri and Dan Flaherty with FIG Partners for a quick recap of the AOBA18 M&A Simulation on The Bank Account.

This is the second of several podcast episodes we recorded in Phoenix.  Sound quality isn’t quite as good as you may have come to expect as we’re back on an older microphone, but we jumped at the opportunity to be able to share our conversations with so many interesting colleagues at Acquire or Be Acquired.  We hope you enjoy the conversation with Matt and Dan as much as we did. We’re already planning a few new tricks for the M&A Simulation at the 2019 Acquire or Be Acquired Conference, and hope you’ll look to join us then.

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"In" vs. "Out" – TARP Recipients So Far

In its Research & Trading Thoughts for Wednesday, November 12, 2008, FIG Partners analyzes the banks that publicly announced approval for TARP Capital funds.

TARP Recipients So Far – You Might Be Surprised: The subject of TARP capital and which banks are “In” versus who is “Out” is unavoidable today. It has become the overwhelming consideration for many investors, and fear of who could be on the “Out” list has led trading to virtually freeze within the sector for some stocks. We must reiterate that TARP is not just for the top performing or largest banks.  This can be seen in the attached list ( CLICK HERE) of performance metrics for the Treasury approved TARP recipients to-date which currently stands at 45, and as shown are far from a perfect bunch. Even with this limited list, banks who have received approval run the gamut with poor credit quality, lack of profitability and weak capital included in the mix.  Examples of each of these include BANR-Banner Corporation with NPAs-to-Assets of 3.10% and Reserve Coverage of NPAs at only 41%.  As mentioned in prior comments, SAGN-Saigon National Bank is a small $55 million asset bank who has never recorded a profit yet was approved for $1.2 million. Lastly, the best example that everyone has a shot at TARP is MBHI-Midwest Banc Holdings who as of 9-30-08 reported a Total Risk-based Capital Ratio that was barely above “adequately-capitalized” status at 8.04% yet was approved for $85.5 million in TARP capital equal to 3% of its risk-weighted assets. We clearly do not feel that inclusion in TARP should be the ultimate investment consideration these days, but since more often than not it is investors need to realistically consider what the true risk of being declined is.

While caution certainly needs to be taken to extrapolate too much from the 45 banks that have announced approval, the approvals do seem to indicate that: (a) banks of all sizes will be approved by the Treasury, and (b) asset quality does not have to be pristine.

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FIG Partners' Analysis of TARP Capital

On October 24, 2008, FIG Partners published an alert analyzing the opportunities for community banks under the TARP Capital plan.

We view the TARP Capital Purchase Program as an excellent opportunity for the banking industry to secure some much needed capital at relatively inexpensive and mildly dilutive terms. The opportunity is particularly attractive at a time when outside capital is extremely difficult to find. As such, we at FIG would like to urge any and all banks and thrifts to seriously consider participating in the program. Some of the immediate benefits of the initiative are:

  • Improves capitalization ratios
  • Provides capital for future growth, organic and M&A
  • Solidifies the institution’s balance sheet and puts it in a position to take advantage of failed institutions/assisted transactions
  • Implies that the institution received the “blessing” of Treasury/regulators – investors are likely to perceive the companies taking advantage of the TARP Capital Program as survivors

Again, we believe that all banks and thrifts should utilize the TARP Capital Purchase program, and since the November 14th deadline is fast approaching, we urge you to explore the program and familiarize yourself with all the details sooner rather than later.

Read FIG Partners’ full alert on the TARP Capital program.  To see all Investment Banker reports on this site, please see all posts tagged Investment Banker.

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