mergers-acquisitions

Trust-preferred creditors have forced two indebted bank holding companies into involuntary bankruptcy this summer. Secured lenders may soon follow their lead and start foreclosing on bank stock collateral.

Care deeply about the price at which you make an investment, whether it's in your own shares or another company's. Don't delude yourself about how great the future will be. And look for empirical evidence that you have an "edge", rather than simply assuming it.

As consumer groups turn their attention to smaller institutions, they bring lending disparities to regulators’ attention. The regulators seem to take these issues more seriously than during bank megamergers’ heyday.

The Capital Asset Pricing Model’s value is debatable in normal times. If misapplied in today’s ultralow interest rate environment, it can severely overvalue banks and excuse poor operating performance.

Expand by acquisition or through organic market penetration. The most successful banks will include both strategies in their future plans.