Every acquisition does not result in a more profitable business. Far from it, the woods are full of companies shedding past acquisition mistakes. Every UMPQ "pooling of interest" merger has resulted in dilution of common equity, new additions to the board of directors unproven in their new responsibilities, and a new burden of highly paid management. More, because the balance sheets and income statements are reflecting new acquisition situations every year, it's difficult to definitively compare the numbers. This is not to say UMPQ won't work, but rather that "risk" is evident. If the nation moves to a wartime footing, that's another event to add to the economy that has not happpened for many years. Umpq may be a "buy" but, in my view, not at 22xP/E, in a 16xP/E banking economy. However, what do I know?
Thank you for your comments, Private Bud. I was interested in your words re: overpaid management. How can you access those #'s. All I find is Insider trades, and the CEO pay. Can you guide me in this. Also, where do you see UMPQ in 5 years? CEO cashed out, sold out, in Mexico to relax and drink Corona's? I wonder, since I am thinking of dumping some $ in this co.
We�d all like to know where UMPQ shares will be valued in five years, Mr. Biggs.
What certainly know is that UMPQ has new management configuration with new personnel and a partially new board of directors. We also know that executive management particularly, will and has leveraged their option share values to a point where they are no longer dependent on day-to-day employment for a living.
UMPQ�s financial performance and stability will depend on Fed discount rates and how promptly management recognizes and corrects unexpected expense and revenue changes in combined operations. Operating realities of merged acquisitions will not conform to every pre-acquisition financial proforma.
The Herbert�s Milton and Lynn, Mr. Ford, Mr. Haden are solid, respected, business people who have been running on the same track for a long, long time. My guess is that UMPQ shares are a good investment, buying on severe market dips, if these people remain active. However, I�d much prefer that the Board of Directors �gift� common equity to operating management after achieving specified objectives, rather than offer �options�. That would place management on an incentive platform somewhat more equal to every other shareholder and reduce dilution.
Mindful that Fed discount rates are at a 40 year low, I�d buy UMP on serious dips. The shares were selling at less than $8.00, two years ago. Good wishes, Mr. Biggs, for successful investing.