Involuntary Stock Repurchases

If you have excess capital and are looking for a double-digit ROI, a voluntary stock repurchase may be one of your better options. Many community banks have no ready market for small blocks of shares, and some of the ones that do have markets expose themselves to great risks by allowing insiders (directors, officers, the bank) to purchase shares at a price that has no basis in reality. By arming yourself with an independent fair market valuation and offering to repurchase shares on a voluntary basis, you can provide welcome liquidity to shareholders interested in exiting while making an attractive investment for those shareholders who remain.