Introduction to Bank Valuation

Overview

This course explores a high-profile financial collapse in the world of decentralized finance (DeFi) and stablecoins, revealing how complex technology and compelling narratives can mask fundamental weaknesses and fraud risk. Participants will examine how the company built credibility through investor psychology, artificial adoption, and misleading system design, while lacking true economic backing. Through this case study, the course highlights key red flags, structural vulnerabilities, and regulatory issues, equipping professionals with practical insights to evaluate emerging financial models, identify fraud risks, and apply critical thinking in rapidly evolving markets. Recorded November, 2024.

Highlights

• Understand how a bank differs from a regular company
• Comprehend why enterprise value is a meaningless metric for a bank
• Factor regulatory capital requirements into a dividend discount model
• Learn how to value a bank that doesn't pay a dividend
• Use similar banks and return on equity to value a bank's equity
• Mark a bank's balance sheet to market value

Objectives

• Review ways the operation of a bank differs from a non-bank.
• Understand why we cannot calculate enterprise value for banks and why we need to consider a bank's regulatory capital in our valuation.
• Discuss the most common bank valuation methodologies: the dividend discount model, the residual income model, comparable analysis and regression, and calculating a bank's net asset value.

Preparation

Attendees should have a basic understanding of valuation, modeling, and analyzing financial statements.

Notice

This is a self-study/on demand course offered by a 3rd party vendor and will NOT be accessible in the My Upcoming CPE section of the ISCPA website. Course access information will be emailed directly to you by CalCPA. The course expires one year from the purchase date. Format = Online Self-Study.