Bank and Holding Company Stock Buybacks: Being Vigilant About Value

Financial Institutions

January 01, 2013
by Kevin Janke, CPA, ABV, ASA

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Kevin Janke Kevin Janke, CPA, ABV, ASA

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We recently were the bearers of bad news to a bank client’s board of directors. We had to tell them that their stock, determined on a minority, nonmarketable basis, was not worth 160% of book value— the price at which they had been redeeming stock. “How,” they asked, “could our value decrease when we are still profitable and our book value has gone up?”

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