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Nw Iowa | Owning bank shares has been good to me, currently own none.( banks sold) Shares are hard to buy and can be hard to sell. Minority shares are just like owning a minority share in farmland, it may turn out well or you could just end up owning something that pays very little while big salaries etc are paid to majority owners and their family. . I guess before I bought I would really like to get a idea of ownership structure and if there could be more shares for sale or not or if bank might be a takeover target. Small ag banks are not getting the spread ( difference between and borrowing out that they are used to) and Compeer is beating them up pretty bad on land and machinery loans because Compeer ( or Farm Credit) has a much easier way to secure funds for long term loans. Internet banking of course is here to stay and do you really need a bank in the future in every town? They are making money but landscape is really changing. If it is money you just want to ride and don’t need you will probably be fine. If you need to take it out to buy a farm in two or three years, might not work out so well because they might not be liquid. Banks today are all so different and can be so complex as far as ownership that every situation is so different.
. Another thing to consider is the size of bank that it takes to just stay ahead of regulation for fed. The Dodd-Frank act was not a friend of small banks. (Kind of funny how democrats are always telling they are for little guy but their regulations always squeeze little guy out) I have been on some bank boards in my life and enjoyed it and learned but there is a fair amount of liability so make sure there is a good errors and omissions policy in place if you have opportunity to be a director and have a feeling what you are getting into. Once again world is much different place than it was in past and owning stocks in local business can still be kind of Wild West as there is not the regulation that there is on publicly traded stocks so much harder to know what you are really buying. I am guessing if you owned a JP Morgan or other bank stock on the stock exchange over time you would be as good or better than owning the local stock over time with more liquidity. | |
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Local bank stock investment
