tag:blogger.com,1999:blog-235433516644980443.post2350489513930415530..comments2024-03-27T05:08:10.195-04:00Comments on Jeff For Banks: For Financial Institutions, Is There Such A Thing As Too Much Capital? Yes. Yes There Is.Jeff Marsicohttp://www.blogger.com/profile/12153599647481141591noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-235433516644980443.post-19152481812016563092018-08-15T14:41:25.664-04:002018-08-15T14:41:25.664-04:00Dave, you are on to something here. Which strategy...Dave, you are on to something here. Which strategy is more accretive to eps, or bv, depending on how the stock is valued (on earnings or book). And I would do the math on long-term accretion, because strategic investments rarely compares to a buyback, debt buy down, or enhanced dividend in a short time period.<br /><br />Thank you for the comment!<br /><br />~ Jeff <br /> Jeff Marsicohttps://www.blogger.com/profile/12153599647481141591noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-85894418256590315942018-08-12T20:35:29.510-04:002018-08-12T20:35:29.510-04:00The other major one I can think of off the top of ...The other major one I can think of off the top of my head is to pay down excess debt (be it holdco debt to finance trust preferred, expansion debt, etc). Though it would seem like it would be smart for a lot of banks to pursue stock repurchase stock (especially when publicly traded and their stock is at something less than common industry multiples of BV; though it may be a bit more difficult if they are non-public, but then, issuing or buying stock in a non-public entity is a whole legal can of worms as well, especially if you are management). <br /><br />While writing this, I did consider if it should be spent on branding or advertising. Though, I'm not sure if that is the best use, given that a lot of banking services are a commodity base, as well as branding is very hard to measure.Davehttps://www.blogger.com/profile/03434873299532223264noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-21910745422578025692018-08-06T18:18:26.929-04:002018-08-06T18:18:26.929-04:00Thank you!
Not many banks think they hoard capita...Thank you!<br /><br />Not many banks think they hoard capital. But feel they need it for a rainy day fund. And regulators are happy when a bank's coffers are full of capital. So some banks may need gentle nudging to return some of the capital when growth won't put it to work.<br /><br />Thank's again for reading and the comment!Jeff Marsicohttps://www.blogger.com/profile/12153599647481141591noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-70811785580769208002018-08-03T21:49:40.299-04:002018-08-03T21:49:40.299-04:00Great post! I wish all the banks that hoard too mu...Great post! I wish all the banks that hoard too much capital read this article. I like it when banks repurchase or return capital when the growth opportunities are not that good.Brandonhttps://www.blogger.com/profile/17626531874106235575noreply@blogger.com