Cedar Hill offers a full service purchase accounting assistance approach to help clients in valuing and recording acquisitions. Cedar Hill’s services are lead with Purchase Accounting Documentation Book that serves as a central depository of accounting methods and documents employed in recording the acquisition in accordance with GAAP. The Book includes an executive summary explaining the valuation methods employed, all general ledger entries used to record the transactions, all valuation reports, purchase accounting amortization tables, and key acquisition documents (acquisition agreement, employment agreements, merger costs).
The Purchase Accounting Documentation Book has been well received by Cedar Hills clients. The book can be shown to companies internal auditors, external auditors and bank examiners to describe the transactions. As part of this service, Cedar Hill will organize a purchase accounting committee of the bank and do weekly, or daily updates on issues as they arise and maintain a checklist of required activities/responsibilities.
Full Service Purchase Accounting Services for Bank & Credit Union Acquisition
Level 1 Services – Pre-Due Diligence Fair Value Assistance
Cedar Hill can prepare a review of the high level preliminary pre-due diligence estimated purchase accounting fair value adjustments and related earnings impact prepared by its investment banking firm and related key assumptions: including estimating a preliminary core deposit intangible, CD, Loan and other requested purchase accounting fair value valuation adjustments.
Level 2 Services – Due Diligence Fair Value Assistance
Cedar Hill will assist the Company in the development of more detailed due diligence preliminary purchase accounting fair value adjustments and related earnings impact working jointly with the Company in the development of related key assumptions: including estimating a preliminary core deposit intangible, CD, Loan and other requested purchase accounting fair value valuation adjustments.
Level 3 Services – After the Announcement of Transaction but before Closing
(Securities Exchange Commission and Regulatory Application filings pro forma financial tables and related footnotes)
With the guidance from Company management and incorporating information prepared by Cedar Hill and the Company, Cedar Hill we assist in prepare for the preparation of Securities Exchange Commission and Regulatory Application pro forma financial tables and related footnotes.
Level 4 Services – Acquisition Date GAAP Purchase Accounting Assistance
Cedar Hill we will prepare an Acquisition Date Purchase Accounting Documentation Book that includes an executive summary of the transaction and description of valuation methodologies employed, purchase accounting entries to be made to each legal entity, the purchase accounting fair values estimates and related documentation, and any other transaction related documentation deemed necessary by either Cedar Hill or the Company. Our clients share the Documentation Book with their internal and external auditors and examiners as a road map to the fair value process.
- Prepare Acquisition Date Core Deposit Intangible Valuation.
- Prepare an Acquisition Date Fair Value Estimate of the Acquired Certificates of Deposit from the Transaction using a present value approach. The fair value of certificates and borrowings represents the present value of the expected contracted payments discounted by market rates of similar certificates of deposits using market rates typically obtained from a third-party deposit rate survey provider, such as Bankrate.com. Cedar Hill will also provide the Company with a monthly amortization table using the “level yield” amortization method to be used by the accounting department to record future amortization.
- Prepare an ASC 310-20 (good loans) Acquisition Date Acquired Loans Interest Rate Fair Value and General Credit Fair Value Analysis
- Assist the Company in preparing ASC 310-30 Deteriorated Loan Loan Specific Credit Fair Value Adjustment for non-performing loan receivables.
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