In early September 2008, in the midst of the subprime crisis, a manager with the student-run Darden Capital Management fund, wants to appraise whether Comerica Incorporated, a regional bank based in Dallas, Texas, is a good candidate for inclusion in his portfolio. He has to perform a valuation of the bank to claim whether the bank seems to be undervalued by the market or whether a further decline in value might not be impossible.
He must account for all the variables that affect bank valuation, both related to the current market conditions as well regarding the bank itself. The case can be taught to: a) examine the valuation of a bank during troubled times; b) understand the key accounting statements (balance sheet and income statement) for a bank and how they may differ from those for an industrial business; and c) understand the key value drivers of bank worth (metrics for profitability, credit quality, liquidity, and capital).
PUBLICATION DATE: March 10, 2009 PRODUCT #: UV1410-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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