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Trustmark Corporation Message Board

  • goodolebozs goodolebozs Aug 20, 1998 4:15 PM Flag

    Another merger issue

    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.

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    • 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.
      Comparing the
      number of shares outstanding simply by itself is really
      meaningless.
      I believe in my comparison of TRMK-DGB I was
      apples-to-apples.

    • 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.
      Also...rember
      TRMK was at 49 and split which doubled the shares.

    • Absolute great post, many thanks. I'm getting amuch better picture.

    • 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
      soon.

    • 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
      opinion.

      Red

    • 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.

      Red

    • 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
      so.

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