Partner Jeffrey Werthan Quoted in Bank Safety and Soundness Advisor on Agencies’ Guidance

Jeff Werthan, Chair of the firm’s Banking Practice, was quoted in an article in the Bank Safety and Soundness Advisor on guidance issued by the five banking agencies stating that fair value gains from acquisitions could be blocked from use in capital calculations, at least temporarily, even though it is permitted under Generally Accepted Accounting Principles (GAAP). “There is a concern among the regulators that the quick creation of capital through bargain purchases can inflate an organization’s net worth over what it should be,” Mr. Werthan says. “They are worried that institutions may feel more empowered than they ought to feel. This is sort of a friendly shot across the bow by the regulators that they will be looking at this newfound capital, and they reserve the right to pull in the reins.” (“Banks Put on Notice by Regulators: Keep Bargain Gains Out of Capital,” June 29, 2010)