February 13, 2020 | Blog News / Updates White Paper

Industry Perspectives | Recent Bank Investor Feedback: What it Means for Your IR Program in 2020

Alpha IR is one of the only experienced options for public banks who need a strategic investor relations partner to navigate the challenging environment expected in 2020 and beyond. The issues that small- and mid-sized banks face today are numerous and are going to require thoughtful communication to appropriately guide Wall Street, as well as all of your other important stakeholders. Our team is in regular communication with institutional investors on behalf of our clients, and we wanted to share some of their recent feedback, noted below, as we found it to be both timely and thought provoking. These were collected just following the closing of the third quarter earnings season:

  • “We own over $300 million of small community banks and we believe they are all going out of business, but their deposits are worth something. Anybody under $2.5-$3 billion of deposits is going to get knocked out. This industry will be disintermediated quickly between 2022-2025, and if you don’t have a tight deposit base and big branches, then you won’t be able to compete.”
  • “I think sometimes if stocks are chronically cheap and companies don’t have share repurchase plans, that sends the wrong message to investors. Investors then begin to wonder if management knows something we don’t know. So, I’m really looking for strong messages around capital allocation when the banking stocks I own deliver their 2020 outlooks early next year.”
  • “The economy grew less than 2% last quarter, and the consensus GDP growth for next year is 1.8%, so growth is slowing. This is a good time for banks to really focus on profitability versus growth as it relates to the balance sheet. Banks need to be ready to tell investors how they will shift their short-term priorities in a slowing environment.”
  • “Bank investors have hundreds of options if they decide to invest in the banking sector, but almost every small- and mid-sized bank sees their investor relations (IR) function as a pure cost center. They need to understand that it’s critical to differentiate yourself over the next few years as the pool of institutional investors that look at this space is getting smaller and smaller.”

As you can see, these comments point to significant, strategic questions about the go-forward path of your company and your peers. To summarize the top issues and skillset that Alpha brings, please see the table below:

About Alpha IR Group:

Alpha IR Group is a full-service investor relations consulting firm that partners with companies to deliver best-in-class investor relations, from strategic insights to daily, tactical execution. Alpha IR offers a range of tailored programs, as well as sophisticated insights and significant experience with activist preparedness, investor day preparation and execution, earnings support, M&A/transaction support, perception studies, and more. The firm’s leaders have over 100 years of combined sell-side, buy-side, investment banking, and IR consulting experience. The firm has offices in Chicago, New York, and Boston. Alpha’s growing staff supports a client base that spans seven industry verticals and represents nearly $100 billion of equity value trading on public exchanges in North America.

Alpha-IR Group
P: (312) 445-2870
E: info@alpha-ir.com

 

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