Holding companies facing looming debt maturities are exposed to the risk of a forced sale or possible forfeiture of the stock of their bank subsidiaries.
Bankers, analysts and investors can no longer simply consider past performance to gauge if banks have enough capital. The what-if forecasting of regulators' stress tests is critical to the exercise.
Changes to product offerings and pricing give the impression that the new bank does not have the customers' best interests at heart. Feeling undervalued is a key emotional reason they defect.
Big banks must get smaller. Small banks must get bigger. All banks must turn their attention away from crisis-era baggage and show how they'll consistently make money from now on.
As loan loss reserves normalize, the earnings benefit from lower provision expenses will abate and earnings will be squeezed. M&A should emerge as an attractive strategy to maintain earnings and generate growth.
Require megabanks to pay their stealth subsidies into a reserve available only to creditors and the FDIC. Market discipline will do the rest, as shareholders demand that the banks shrink.
Consistency and ample communication are the cornerstones of acquisition announcements. Compassion and reassurance to your new team members flow to your customers and the community.
Large expectation value gaps reflect either an investor relations communication problem or questions concerning the validity of management's plan. They can ultimately attract unwanted suitors and hurt a bank's future prospects.
