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.