Our March contest was on the topic "How can we better communicate with shareholders and make our stock a more attractive vehicle in the process?"

Some respondents suggested focus groups, to find out what stockholders really want.

A subliminal message, one banker admitted, is "Give us more of your business and talk us up among your friends." Nevertheless, this banker finds that focus groups can help make the most of a key resource: the bank's owners.

Other respondents urged a more straight-ahead approach: Just do your job. Allen Greene, chief executive officer of Ryan Beck & Co. in West Orange, N.J., and formerly a bank CEO himself, put it simply:

"Be credible, honest, and forthright. Don't disappoint the shareholders. Don't state what can't be accomplished as if it can. And don't take a big bonus if the bank itself did poorly."

Mr. Greene suggested that the chief executive officer use the annual meeting as a chance for real shareholder education. Also, he said there is value in handling all letters from shareholders by a personal call or response, instead of a form letter.

The chief executive should call all major shareholders after release of earnings reports and other significant data, to give them personal attention, Mr. Greene said. Most important, listen to find what is really behind each communication from a shareholder.

The Ryan Beck chief executive also warned:

"Following the stock price is futile. Just do the right things and it will go up over time, no matter what the market does to your stock day by day."

* * *

Despite these fine contributions, the Schmidlap Award this month goes to (drum roll) . . . David E. Albertson of Prairie Capital Services Inc. in Evanston, Ill.

Mr. Albertson emphasized working to improve market performance. This, he observed, is the main way a bank can provide benefits for its shareholders. He added:

"Many community banks have limited trading markets for their stocks, as you know, and because of this they are at a disadvantage to their larger competitors. It can be more difficult . . . to raise additional capital. The president may end up making a market 'out of his desk,' and the shareholder does not always receive a market price or a timely transaction, not to mention the liability to the bank of this practice. Further, an illiquid stock is not the best acquisition vehicle."

In short, Mr. Albertson said, anything you do to develop a more liquid market for your shares should bring some benefit for the bank and its shareholders.

His suggestions include:

*Raise additional capital.

*Establish relationships with first one and then two broker-dealers who will serve as market makers.

*Go from "pink sheet" listing to Nasdaq.

*Consider issuing stock dividends on a regular basis as part of a planned cash dividend policy.

Such steps, Mr. Albertson wrote, help local shareholders view their investment in the community bank "as much more 'interactive' than something to be placed under the socks in their bureau drawer and handed down to the children of the grandkids.

Furthermore, shareholders who "feel they have a real and liquid investment . . . might just be comfortable buying more of it," he observed. "And it has been our experience that local shareholders are an important core business element."

Some might argue that shareholders communicate with management by their buying or selling the company's shares, Mr. Albertson noted. But if the bank "makes it easier to do this by improving the liquidity of the market," he wrote, it has gone a long way toward improving shareholder communications.

* * *

The next contest asks, What about intrabank dating?

Should the management of a bank object if two employees start dating or if they eventually marry?

In some banks, this is a no-no. The fear is that it will lead to favoritism, a willingness to violate bank rules for your "significant other," and an atmosphere that turns the bank into a social center where conversations at the water cooler mean more than doing the day's business.

Others take the attitude that dating is fine. For example, Citibank recognizes that many people work so hard that the only place they can meet people is in the bank. In fact the general term used for people who met in the bank and married is "Citicouples."

What is your bank policy?

Mail your response to me at 14 Friar Tuck Circle, Summit, N.J. 07901, or fax it to 908-273-7309. The respondent who offers the most useful advice will, naturally, become president for a day of Schmidlap National Bank and receive our certificate, suitable for framing.

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