Small bank stocks can be hard to find, but are worth their weight in gold when you uncover the right one.

23 Mar

            Everyone’s heard of the megabanks like Bank of America. A lot of investors have heard about big regional banks like Umpqua Bank (NASDAQ:UMPQ). But not too many have heard of Carter Bank and Trust of Martinsville, Virginia.

Does that lack of notoriety make Carter Bank, or any of the thousands of other small, community banks around the country, a bad investment? Or maybe it’s just the opposite.

Host Gaby Lapera and special guest Tim Hanson think that small banks are not only an interesting niche in the investing markets, but one very much worth your time. What makes these banks small? Why should an investor even bother with the effort of researching and investing in them? What are the advantageous, disadvantages, and common mistakes investors make when wading into these waters?

What are the key checkboxes you must check off before clicking buy? The answers to these questions — and more — are right here in today’s financials edition of the Motley Fool’s Industry Focus podcast.

(proposed) Gainey Business Bank to be in Scottsdale, AZ has just a few Director/Investor slots still open

 

 

…………………………………. Return on Investment Potential ……………………………………..

 

                                                            Directors                        Stockholders

 

Monetary

 

  • Stock       X                                       X
  • Dividends       X                                       X
  • Initial Stock Options       X                                      
  • Fees

                        Cash                                  X

                        Stock                                 X

                        Options                             X

                        Insurance                           X

                                    D & O            

                                    Health            

                                    Disability        

                                    Life                

  • Deferred Comp                   X
  • Retirement                   X
  • Travel                   X

 

  • Security of one’s own invested funds in an institution over which one has input.
  • Diversified investment with extremely high success rate.
  • Potential to open doors for opportunity.
    • I don’t recall any bank I have helped form where directors have not gone into other non-bank business ventures with fellow directors. Working together over the period of time it takes to form the bank exposes directors to special occasions.  All are successful business people, usually qualified investors with similar business and personal values.  Ultimately, all are FBI checked and bank regulator approved.
    • Bank building ownership and possibly equipment. The bank does not own the bank building.  The bank leases from a third party or a partnership consisting of directors who want to participate.

Non-Monetary

 

  • Building a personal relationship with the Bank.
  • Enhanced personal relationships with other banks.
  • Civic pride in providing locally available capital.
  • Directing services and contribution to non-profits.
  • Awareness of what is happening in the local business community.
  • Camaraderie with other prominent members of the community.
  • Education in how banking really works.

John Chandler … 602.482.0017 …, johnc@chandlersearch.net

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