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Umpqua Holdings Corporation Message Board

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  • pvbud pvbud Jun 23, 2004 6:13 PM Flag

    Everybody snoozing?

    Almost, Faye. Usually CEO's and officers are favored with the largest stock options and personal company loans. These days, as you suggest, directors also provide for themselves at the option trough. All such options normally dilute the value of shares held by the public. (Hence a reason for share re-purchase plans with company funds that could otherwise be used for dividends, or to strenghten the balance sheet, no?)

    AS Smallbanks pointed, selling banks want premium prices and that "premium" comes from the hide of the purchasers, like UMPQ. In the short term and perhaps longer, that tends to reduce or hold steady the share price of the buyer's common stock. Separately, there is the merging employee factor, the result of which is not always known and a story for another time. However, we know it did not work-out with Bill Haden at Valley of the Rogue Bank, an astute banker, who is now in competition (CACB) against UMPQ in the Rogue Valley.

    A more current event, here is a thought about the Fed increasing rates: The June move (futures are assigning a 90% probability of a .25% point increase for June) may not be the one to worry about.It is the 1.00% before year end followed by another several hundred basis points over the next couple of years after the election that will compress contract spreads, net interest margin, net earnings, and EPS of financial houses.. During the past few years UMPQ has not operated in this increasing interest rate atmosphere. It will be of interest to observe.
    Best wishes to all.

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