Stocks Surging, But Banks Still Turning to Buybacks
American Banker (08/28/00) Vol. 104, No. 34 p.24; Rieker, Matthias

Although financial stocks are rebounding, many banks, especially smaller ones, are continuing buyback efforts. Six interest rate hikes by the Fed have put pressure on banks' valuation, prompting many banks to buy back shares. Mark Fitzgibbon, a managing director at Sandler O' Neill & Partners, believes that buybacks will cease as investors' capital flows back into financial stocks. Among the banks he covers, Fitzgibbon is expecting that BankNorth Group and Republic Security Financial will repurchase shares aggressively. Meanwhile, Erick J. Reim of U.S. Bancorp Piper Jaffray, predicts that the repurchasing trend will continue until next year, when merger and acquisition activities will pick up and offer more profitable ways for banks to spend their excess capital.


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