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dc.contributor.authorHirtle, Beverlyen_US
dc.date.accessioned2012-08-17T14:26:58Z-
dc.date.available2012-08-17T14:26:58Z-
dc.date.issued2001en_US
dc.identifier.urihttp://hdl.handle.net/10419/60641-
dc.description.abstractUsing data from bank holding company regulatory reports, we examine the relationshipbetween stock repurchases and financial performance for a large sample of bank holding companies over the years 1987 to 1998. The primary result is that higher levels of repurchases in one year are associated with higher profitability and a lower share of problem loans in the subsequent year. This finding is robust to several different ways of measuring share repurchase activity. Our results appear to be driven primarily by bank holding companies with publicly traded stock, especially those companies whose stock is traded on major exchanges. The finding that higher repurchases are followed by better financial performance is consistent with at least two distinct behavioral hypotheses. First, bank holding company managers may opt to return excess funds to shareholders when they have limited outside investment opportunities. Alternatively, managers may choose to increase repurchases when they have private information suggesting that the future profitability of the bank is likely to be strong. We find evidence suggesting that the repurchase-performance link may be driven by different factors for different types of bank holding companies. In particular, the evidence is consistent with the first hypothesis for banks traded on major stock exchanges, but only weakly supports this explanation for smaller, closely held companies.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 123en_US
dc.subject.jelG21en_US
dc.subject.jelG35en_US
dc.subject.jelG34en_US
dc.subject.ddc330en_US
dc.subject.stwAktienrückkaufen_US
dc.subject.stwBanken_US
dc.subject.stwHoldingen_US
dc.subject.stwBörsenkursen_US
dc.subject.stwBetriebliche Kennzahlen_US
dc.subject.stwUSAen_US
dc.titleHow do stock repurchases affect bank holding company performance?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn331477823en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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