Moves that would increase earnings NOW. Crosby, are you listening?
Here are some moves the CEO and board should be making to increase earnings-
1. Give up on this new investment you dubbed "common rails". Nobody can even explain what it is, and by the time anything gets done, it will be obsolete anyway. Crosby- You are the only person on planet earth who thinks it is a good idea. It is time to admit you are wrong. Get over your ego and listen to the experts and scrap this ridiculous nonsense.
2. FNFG is sinking under high interest debt- GET RID OF THE DEBT!!!. FNFG is paying 8% on borrowed money. FNFG doesn't earn 8% on anything it does. It doesn't even net 2%. The most profitable thing First Niagara could do with its money would be to pay off debt. Paying down the debt would be immediately profitable. Every penny of earnings should be used to get rid of high priced debt. FNFG is paying an 8% dividend on the preferred stock. Buying back this debt will immediately earn an 8% return.
3. Eliminate the common dividend and use that money to also buy back preferred shares. Using a 4% dividend to get rid of an 8% debt would have an immediate doubling benefit to shareholders. There is no reason to borrow money at 8% so you can pay a 4% dividend. IT DOESN"T MAKE ECONOMIC SENSE. And don't worry that the stock price will suffer if the dividend is suspended. You already took care of that. And if you tell the analyst that you are using the 4% dividend to earn 8%, they would applaud the intelligent idea.
4. Sell all fixed mortgages NOW while you still can. First Niagara is carrying 15 and 30 year mortgages on the books that have interest rates of 3.5%- 5%. That is OK today because you pay 0% on deposits.This anomaly is not going to continue for 30 years. We are going to have inflation. We already have inflation but the government is in denial. Rates will go up. What happens in 5 years when FN has to pay grandma 10% on her CD and is stuck collecting 4.5% on Mrs. Jones mortgage for 25 more years?
You are a pompous #$%$ and have no idea what you are talking about. This bank pays a very healthy dividend. That is all that matters. It is not up to shareholders to question the actions of executives. As long as there is a dividend, it does not matter what the stock price is. It is even better when the price goes down because the dividend rate goes up and we get more money!