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First Niagara Financial Group Inc. Message Board

  • thriftmannj thriftmannj Jan 29, 2014 11:40 AM Flag

    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?

    Sentiment: Strong Sell

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    • 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!

      Sentiment: Hold

    • Also, you have to keep in mind that the "Scenarios" you are creating here affect ALL banks. Not just FNFG. If what you are saying happens, there are much BIGGER problems from the Feds than FNFG being at $8. FNFG will be the safest stock with these scenarios. The 8% debt will probably be "reissued" if rates keep going down. Fromt he current bond rates and the moves ECB has made, rates are not going up. In 10 years, FNFG will be much bigger than it is today. My prediction, it will be entire US than just the NE. Whether it will merge or be acquired, who knows. But shareholders will get a safe return as they have for past 5 years even with the 2008 crisis.

      If you want to buy a tech stock, go buy it. This is a bank, not a tech stock.

    • And what is wrong with .75c earnings, PE 11.33 and better set for the future? I mean the bank has traded $8-11 for 4 years, paid out good dividends. Why do we want to stop this expansion? For the banking crisis , it held up well. Inflation to 10%, you think Janet Yellen will let Inflation go above even 3%? Before Inflation hits 10% , Bank of America will be acquired by FNFG with the request of the Feds. Because Europe is pointing to Deflation, not inflation.

      Sentiment: Strong Buy

 
FNFG
8.18+0.170(+2.12%)Jan 29 4:00 PMEST

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