Fairness Opinions

When you are considering a bank M&A transaction, in most cases your board will need to obtain a fairness opinion from an experienced financial advisor, who is independent of the transaction, to avoid any appearance of a conflict of interest and subsequent potential liability. This is usually driven by the legal aspects of the contemplated transaction, so you should consult with your legal counsel early in the process to determine the need for a fairness opinion, which may become an integral part of the closing of the transaction.

Fairness opinions prove the bank’s board has met its fiduciary obligations to the its shareholders. The board of directors must first make their decision in good faith, with no conflicts of interest, and on a prudent & sound business basis. Generally, under the business judgment rule, the board is protected from liability to a company’s shareholders for decisions evidenced by the fairness opinion.

At Hopkins & Howard, with our years of banking experience and banking market knowledge, we give our banking clients an independent evaluation of the financial terms of the transaction; evaluation of pricing determination; assessments of due diligence reports; and reviews of transaction documentation including definitive agreements and ancillary agreements. Fairness opinions are a critical step in the transaction process and are usually included in proxy materials to ask for support in shareholder approval of the transaction.

Hopkins & Howard has been involved with numerous banking mergers & acquisitions over the past 25+ years. We have issued fairness opinions for banking institutions across the United States.

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