Understanding the value of non-maturity deposits is essential to the proper valuation of a banking franchise. As low-cost liabilities, deposit relationships can represent substantial value. Estimates of this value vary, however, with assumptions about the future behavior of deposit accounts.

This article highlights the observations and theories that are the foundation of deposit valuation and provides a simple valuation framework.

CLICK HERE to start to reading and to download the full PDF.

CLICK HERE to view the article in the March 2016 issue (available now) of The RMA Journal.