Many financial institutions continue to face a high level of scrutiny by both the public and regulators. However, heightened pressure remains on these companies to perform, despite operating in a low interest rate environment and being saddled with heavy regulatory compliance. And the cost of compliance programs needed to meet these increased regulatory burdens has sky-rocketed. Meanwhile, this extended low interest rate environment has compressed margins and spreads, making it more difficult for firms to generate earnings for shareholders. Some financial institutions are finding it extremely difficult to make annual payments due to lenders/investors (e.g. community banks who borrowed TruPS), resulting in overleveraged balance sheets.
Looking ahead, lack of access to liquidity remains the primary concern. Overleveraged firms will continue to have a very difficult time de-levering their balance sheets with cash infusions because weak anticipated capital returns have subdued investor appetite. As a result, we expect to see an increase in M&A within the sector as transactions may be the only viable route to recapitalize and compete in the new world these institutions are facing.
Carl Marks Advisors is a nationally recognized investment banking and corporate restructuring firm serving the middle market. Our unique multifaceted platform and experienced team of investment banking and consulting professionals provide full service solutions for financial services companies, such as community or large regional/commercial lending banks, asset managers, specialty finance firms, and mortgage servicers/originators. We specialize in working through complex situations and bringing every engagement to a successful close.
While the scope of our services is customized to fit the needs of each client, our work for financial institutions can include the following:
- Sellside M&A Banker: We specialize in streamlining the complex sale process and maximizing value through our differentiated approach to identifying specialized buyers, optimal market prices and terms, and ensuring successful closes.
- Refinancings: Carl Marks Advisors provide valuable insight and key relationships in the capital markets, helping guide financial services companies in developing financing solutions that support growth.
- Secured Lender Advisory: We have advised numerous lenders on protecting their collateral positions, devising strategies to maximize claims, and implementing strategies to derive value in even the most challenging situations.
- Debtor Advisory: Having steered owners, boards, management teams, and stakeholders through the journey many times over, Carl Marks Advisors have the experience to provide targeted and concise strategic assessments and solutions for our clients.
- Advisor to Unsecured Creditors Committees: Our advisors combine transactional investment banking expertise and financial advisory skills to offer a forceful solution for unsecured creditors committees.
- Expert Testimony: Courts nationwide recognize Carl Marks Advisors’ senior professionals as experts in their fields, providing evidence that supports necessary motions, relief and fact testimony.