Forget dividends. Did you look at the price action? You would be lucky if you get back what you had put in. HCBK shareholders are going to get shafted at the altar of this merger.
Good luck, buddy. We have been waiting for over 2 years. The guy who engineered the merger (Ron Hermance) is dead and the clueless risk manager at MTB just got replaced. The official word is that MTB is designing state of the art BSA/AML compliance system. Who knows what they are upto? Either someone dropped the ball on this one big time or maybe the real intent is not to merge. How the bank the size of MTB cannot be in compliance with BSA/AML regs is beyond me. At this point, I put the odds of this merger ever happening at 1 in 3.
You must be new to the IPO market. This stock was propped up. The price action today tells you that this is going down. Also, look at the price after the close today. This is a loser.
What a total screw-up HCBK BOD and Management has become or should I say we should have recognized this all along. One of the arguments put forth by some is that this interest rate environment does not justify expanding the balance sheet. If you accept this notion then you cannot help but wonder what all those highly paid HCBK loan officers are doing, really? From what I vaguely recall when I read an annual report long time ago, HCBK employees have a stock plan and a pension plan. Who is going to fund this pension? I raised the issue in my 7/31/2013 post that it is really surprising to see how HCBK BOD awarded a compensation package to Hermance and other top officers that is 10 times the size of pay packages of MTB CEO! I am all for competitive pay packages and performance bonuses provided there is something to show to your shareholders. Meanwhile we have had to undergo two brutal dividend cuts and as far as I recall, neither Management nor employees have had to make any sacrifice. How #*$ backwards is this? Why do we approve these pay packages year after year and reelect this BOD even when shafted by them? It really makes you wonder whether this BOD cares about us at all. Even when times were good and Hudson was making oodles of money, It makes you think whether all those profits were a result of favorable business environment or made to look like a result of superior management. If you think that it was as a result of superior management, then you will have a hard time reconciling the fact that the management totally mismanaged the interest rate risk. This is what bankers do day in and day out! This is their job. Where are those activist, pension fund, and hedge fund managers when you need them? It is time for a wholesale change. It is so screwed up, it is not even funny.
I agree. In my Aug. 2013 post, I raised the issue of management comp. I feel that their comp. is atrocious while shareholders had to go through two dividend cuts. Why are shareholders approving these hefty pay packages year after year with no cuts in pay or head count? One of the arguments is that it is not their doing but that they are in a bad business environment. If that's the case how does one justify these pay scales? Hermance is paid 10 times more than MTB CEO! If the interest rate environment is such that it is not profitable to expand the balance sheet, then what are all these loan officers doing, really? From what I vaguely recall, these guys have a pension plan! Who is going to fund these pension? Where is BOD on this?!! Just look at their corporate governance score on a yahoo profile page. It is the worst rating one can get. Where are the activist shareholders, hedge fund managers? This is so #$%$ backwards, it is not even funny. I am just afraid a lot of IPO shareholders are going to be left holding a leaky bag of S#@t.
Just look at Yahoo's profile page for POT http://finance.yahoo.com/q/pr?s=POT+Profile
Key Executives Pay Exercised
Mr. William J. Doyle , 62
Chief Exec. Officer, Pres and Non Independent Director 2.24M 48.30M
Mr. Wayne R. Brownlee , 60
CFO, Principal Accounting Officer, Exec. VP and Treasurer 952.00K 19.95M
Mr. George David Delaney , 52
Chief Operating Officer and Exec. VP 857.00K 3.58M
Mr. Joseph A. Podwika , 50
Sr. VP, Gen. Counsel and Sec. 637.00K 0.00
Dr. Stephen Francis Dowdle Ph.D., 62
Pres of PCS Sales 641.00K 6.60M
Amounts are as of Dec 31, 2012 and compensation values are for the last fiscal year ending on that date. Pay is salary, bonuses, etc.Exercised is the value of options exercised during the fiscal year.
Currency in USD.
and these people are selling fertilizers! They are operating in a crumbling oligopoly environment. Wow, the compensation committee must think that they are either geniuses or hedge fund managers. The only chart that the prospective investor needs to look at is the one above to determine whether they are going to laugh or cry all the way to the bank.
Consider these facts.
2Q 2013 Income = $48.7 million = Approx. $200 million when annualized
Top Management Compensation per yahoo profile page = $10+ million or 5% of Annual Income
Hermance's compensation = $4.07 million = 2% of Projected total net profit
Robert Wilmers' compensation = $2.712 million = 0.2% of Projected total net profit of $1,392 million (based on 2Q 2013 reported profit of $348 million)
So HCBK's Board thinks that Hermance should get 10 times more than the CEO of MTB for delivering a lousy performance.
The Board was quick to cut shareholder dividends twice but if you look at HCBK's top guys' pay packages, you would think that they are doing a terrific job!
Just look at HCBK's ISS Governance QuickScore as of Jul 1, 2013 on its yahoo profile. It is 10, the worst possible rating it can get.
Who do they think they are, Hedge fund Managers?
This stock has been a dead investment since 2004. It is more of a dividend play and who knows how long that is going to last. I hope the Board takes this into consideration when deciding on the pay-packages for the executives. I hope there is a clawback provision. Even if you take into consideration other performance matrix such as market share growth, deposit growth, profit growth etc..., it means very little to shareholders if these successes are not reflected in the stock price. The management has done a terrible PR/communication job with the Street, especially if you compare Hudson's share price with those banks that took TARP etc... What gives? Yes, an INVESTOR has to have patience, but how long? Even if you look into earlier years, say from 2004 through 2007 and compare growth in the mortgage market with Hudson's stock price trend during the same period, it is very difficult to justify hefty pay-packages. JMHO.
I agree. I was surprised to learn of his pay package. Granted, much ($37.55M) of it is in stock options. But still it sounds a bit too much given the stock's performance since the secondary IPO and comparing the stock's performance to those of the banks in the peer group. Don't begrudge his paypackage as long as the stock's performance improves in a reasonable time frame. Many posters have noticed how poorly the stock has performed regardless of the actual earnings. Something is not right with this stock
I am confused. Hermance gave a detailed guidance yesterday and the stock soars up by 11%. Today, it is down even before Moody's announcement! As I understand it, Hudson does not sell the jumbo loans it makes. It retains and services these jumbo loans. And the securities it buys are backed by GSEs. So, how's this announcement from Moody's negative for Hudson? Am I ignorant or the street has just gone bonkers? It seems like someone does not want this bank to succeed. Anybody who can throw any light about today's move? It will be much appreciated. Very much miss the postings by JJR1998, corvette_kid1, same_period. Where's evrybody?
The one-time charge would be closer to 18M if you assume the deposit base at $18B. It appears that FDIC will reduce one-time charge to $0.10/$100 from $0.20. It will hit Hudson's bottom line but not materially, imho. The more worrisome issue is the level of non-performing assets given the bleak employment and real estate picture for the tristate area.
Buy-back won't solve the problem. As earlier poster mentioned, some of these Ultra Short (leveraged) ETFs are shorting this stock along with the basket of not-so-pristine financials. There is no gurantee that the buy-backs will work. The stock has a float of 437.1M shares. If the Bank were to buy 15% of the float at either $7.50 or $8, it will need to spend approx. $500M. How long would such a buy-back prop-up the stock price against the on-slaught of shorts? Even-if it were to prop-up the price, how would it help all the longs? So we can all sell at $10 and get out unscathed? It is safe to say that was not what longs had in mind when they invested during the 1st and secondary IPO. Nor would increasing the dividend be helpful as the current yield is reasonably high although raising dividend gradually is preferable imho to buy-backs as the latter benefits traders more than the investors. The Bank should instead conserve capital. The question that we should be asking is "Are both the shoes in place?" The shorts are betting that unemployment in the tri-state region is going to hit Hudson's bottom line and equity materially. The fact that it is trading below tangible book reflects that sentiment. Blogs about New York real estate price decline and its impact on the prices in the suburbs is worrisome. Insider sales disclosures make going long a very gut wrenching experience. Hermance should give some sort of guidance about the financial health of (once) "mighty hudson". But then again, he might just say "It is time to bring in the goat".