Why wouldn't every firm downgrade PBCT now? Answer- They will. Can't the CEO do simple math?
Another great years performance at Peoples according to the CEO. Barnes states that it was a great year in a tough environment, but numbers are up in every category. Really? 2013 income was $232 million, and 2012 income was $245 million. That is $13 million less, but Barnes says income is up. Does the CEO of a large bank know how to do math? He wants us to believe that because the bank spent all of its excess capital buying back overpriced shares, that he did a great job for investors. He claims earnings per share are way up, as if the bank improved in some way. Earnings per share are only up because there are less shares. Total earnings have been steadily declining- ALONG WITH THE BOOK VALUE OF THE BANK!
Now that Barnes has run out of money to buy back shares, how is he supposed to keep the share price up? Short of actually improving the bank, how is he going to increase earnings per share if the share count is not going to decrease, but rather increase, because of all of the incentive shares that Barnes & Co are giving themselves for what they call a job well done?
People's Bank has the lowest customer satisfaction rating of any bank in the North East, and deposits are on a steady decline. There is now nothing to sustain the share price. Every analyst should downgrade this bank today. And Barnes should be fired.
The banked earned less money in 2013 than in 2012. The company bought back some shares so it looks like the bank earned more per share than it earned in 2012. But Peoples Bank bought back the shares with money that already belonged to the shareholders. Management used your money to buy shares so they could tell you that they earned you more money......so they could continue to earn big salaries doing a poor job.
Its an unimpressive track record for Peoples, day in and day out with a decent dividend. Its always been that way at this company. So my advice is if you want predictability and can live with their style, own it. If not move on and stop complaining. I have watched this message board for over 10 years and the complaints are the same as is the mediocre performance. But everyone takes that dividend. When earnings dropped below the payout the rumors said they would discontinue it. Now its back over the amount of the dividend so I guess while its a high percentage payout of earnings, its sustainable. This is a vanilla bank and they will not start to crank up profits until the interest rates start to go back up. Margin compression is the bane of the industry and the institutions making the huge profits do so with investment banking services and derivatives (which is great when its going well and very ugly when it goes to pieces). And lets not go into the federal investigations and fines which are chewing up Chase's profits, however impressive they are. Neither activity is being engaged in with Peoples so they are left with traditional banking products - loans and deposits to make most of their income. On the plus side, they are not in imminent danger of going out of business.