All markets are uncertain. These seems to be at
the high in of the scale though. Put aside profits
and increased earnings potential of a merger for the
purpose of this message. TRMK is a relatively old bank;
had many stock splits. There are probably many
shareholders that have larger positions than one may need in
such a volatile market. This is a very thinnly traded
stock and often difficult to move large blocks. If TRMK
were to merge into another institution, present long
time holders could lighten their position without
adversely effecting the stock. Investors are often more
attracted to stocks that one can easily move in and out.
Bigger market higher price.
please excuse my misstatement in pararaph two. It
should be market value not book value.
If you were
refering to the statement of size comparison, I was simply
answering a question. If I recall correctly, DGB was the
largest bank holding company and second largest bank
domiciled in MS. TRMK being the largest bank. Size
reflexing market share means value to a merging bank.
To determine the book value of a stock, one
should divide stockholders' equity(not assets) by the
number of outstanding shares.
One determines market
capitalization by multiplying the number of outstanding shares
to the book value of the stock.
number of shares outstanding simply by itself is really
I believe in my comparison of TRMK-DGB I was
Remember...compare apples to apples...Comparing
DGB to TRMK can be done but remember the number of
shares. Book values can be compared but not price per
share. Book value is assets / shares.
TRMK was at 49 and split which doubled the shares.
When DGB sold to FAM, DGB was app. $.7B larger
than TRMK is today. The price was set a app.
4.2X=$64.12. 4.2X book of TRMK today would be app. $36.12.
After reviewing my figures, my earlier price of $30-$35
may be to cheap. With so much uncertainty in fianical
markets, Y2K, and just not being on the inside of TRMK it
is hard to really know what TRMK is worth. I know
that I would trade my TRMK shares for $36 of RGBK
today. But the price of banks is usually based of book
value or earnings.
As for the dead horse--if a very
small presence in rural TN, and a few branches in AL
add that much value to BXS I am surprised. BXS
greatest value is wide coverage area of MS. Its weakest
point is its heavy concentration in Tupelo, which is a
great little town, it is not the capital
city,population center.Also, BXS's MS market share is 4th. Market
share is KEY.
The market has punished FAM for the
price it paid for DGB. I keep expecting FAM to merger
I'm no banker Red but this Ms. thing is blown out
of proportion. The buying bank can add the other
locations. true Ms. is not an industrial giant but it has
it's qualities. As has been mentioned it's located in
the capital so therefore much government in fact just
about all government and schoools. But let's not forget
our newest industry gambling. The MONEY people are
puring money into our fair state and trying to gain new
sites everyday. Peole are overlooking Ms. that's why
Dep Guar. had such a good ride. It's awell kept
secret but it's their Red and the Money people know it.
Unless things changed without me knowing it there
was a substantial gap between DG and TRMK in asset
size. Also, and I hate to keep beating a dead horse,
but DG was in other states. I still believe the
strictly MS thing is hurting TRMK. All just my
Most banks in general buy their core systems from
vendors. Few have complete systems written inhouse. I did
read one time that I believe Chase had it's own
inhouse loan system. But it has been my experience that
this is rare. I know in the 2 banks that I worked for
as a programmer this was true.
Dep Guar. got $64 a share and we're talking
bewteen $30 to $35 a share for what was essentially the
same size bank. How did this happen? Why does the
market capilization keep going down? Is it going down or
is it me? We're losing money here or is someone
giving it away? Thanks in advance.
I spoke with someone from a small bank that
merged with UPC. He told me that most small banks were
running a software package that was upgradable to YR2K in
the current release. It is therefore fairly easy for
the small banks to upgrade. However, large banks that
have their own in house software, have to modify their
own software. In which case, it may be easier to sell
out to another bank that has already done this. Look
for this to occur later this year or early 99. They
cannot aford to wait until late 99. It is probably not
easy to convert one system to another in a month or